**Exhibit 10.1**

 

EXECUTION COPY

 

 

 

AMENDED AND RESTATEDCREDIT AGREEMENT

 

DATED AS OF August 31,2007,

 

among

 

ATLANTIC TELE-NETWORK,INC.,

 

as Borrower,

 

COBANK, ACB,

 

as Administrative Agent,Arranger, an Issuing Lender and a Lender,

 

BANCO POPULAR DE PUERTORICO

 

as****anIssuing Lender and****aLender,

 

 

and

 

the other Lendersreferred to herein

 

 

 

----

 

TABLE OF CONTENTS

 
| SECTION 1 AMOUNTS AND TERMS OF FACILITIES | 1                                                                          |
|-------------------------------------------|----------------------------------------------------------------------------|
| 1.1                                       | Facilities                                                                 | 1 |
|                                      | (A)                                                                        | Revolver  Facility | 2 |
|                                      | (B)                                                                        | Term Loan  Facility | 2 |
|                                      | (C)                                                                        | Notes | 2 |
|                                      | (D)                                                                        | Advances | 2 |
|                                      | (E)                                                                        | Letters of  Credit | 2 |
| 1.2                                       | Interest                                                                   | 6 |
|                                      | (A)                                                                        | Interest Options | 6 |
|                                      | (B)                                                                        | Applicable  Margins | 7 |
|                                      | (C)                                                                        | Interest Periods | 7 |
|                                      | (D)                                                                        | Calculation and  Payment | 8 |
|                                      | (E)                                                                        | Default Rate of  Interest | 8 |
|                                      | (F)                                                                        | Excess Interest | 8 |
|                                      | (G)                                                                        | Selection,  Conversion or Continuation of Loans; LIBOR and Quoted Rate Availability | 9 |
| 1.3                                       | Notice of  Borrowing, Conversion or Continuation of Loans                  | 9 |
| 1.4                                       | Fees and  Expenses                                                         | 10 |
|                                      | (A)                                                                        | Unused  Commitment Fees | 10 |
|                                      | (B)                                                                        | Certain Other  Fees | 10 |
|                                      | (C)                                                                        | Breakage Fee | 10 |
|                                      | (D)                                                                        | Expenses and  Attorneys’ Fees | 10 |
|                                      | (E)                                                                        | Letter of Credit  Fees | 11 |
| 1.5                                       | Payments                                                                   | 11 |
| 1.6                                       | Repayments of  Loans and Reduction of the Revolver Loan Commitment         | 12 |
|                                      | (A)                                                                        | Scheduled  Termination of Revolver Loan Commitment and Repayments of the Term Loan | 12 |
|                                      | (B)                                                                        | Reductions  Resulting From Mandatory Repayments | 12 |
|                                      | (C)                                                                        | Voluntary  Reduction of the Revolver Loan Commitment | 13 |
|                                      | (D)                                                                        | Mandatory  Repayments | 13 |
| 1.7                                       | Voluntary  Prepayments and Other Mandatory Repayments                      | 13 |
|                                      | (A)                                                                        | Voluntary  Prepayment of Loans | 13 |
|                                      | (B)                                                                        | Repayments from  Insurance Proceeds | 13 |
|                                      | (C)                                                                        | Repayments from  Certain Asset Dispositions | 14 |
|                                      | (D)                                                                        | Repayments from  Debt Issuances | 14 |
| 1.8                                       | Application of  Prepayments and Repayments; Payment of Breakage Fees, Etc. | 14 |
| 1.9                                       | Loan Accounts                                                              | 15 |
| 1.10                                      | Changes in LIBOR  Rate Availability                                        | 15 |
| 1.11                                      | Capital Adequacy  and Other Adjustments                                    | 16 |
| 1.12                                      | Optional  Prepayment/Replacement of Lender in Respect of Increased Costs   | 16 |
| 1.13                                      | Taxes                                                                      | 17 |
|                                      | (A)                                                                        | No Deductions | 17 |

 

----

 
|                                        | (B)                                                          | Foreign Lenders                                | 17     |
|---------------------------------------------|--------------------------------------------------------------|------------------------------------------------|--------|
| 1.14                                        | Changes in Tax  Laws                                         | 18                                             |
| 1.15                                        | Term of This  Agreement                                      | 19                                             |
| 1.16                                        | Letter of Credit  Liability                                  | 19                                             |
|                                        |                                                         |                                           |
| SECTION 2 AFFIRMATIVE COVENANTS             | 19                                                           |
| 2.1                                         | Compliance With  Laws                                        | 19                                             |
| 2.2                                         | Maintenance of  Books and Records; Properties; Insurance     | 20                                             |
| 2.3                                         | Inspection;  Lender Meeting                                  | 21                                             |
| 2.4                                         | Legal Existence,  Etc.                                       | 21                                             |
| 2.5                                         | Use of Proceeds                                              | 22                                             |
| 2.6                                         | Further  Assurances; Notices of Acquisition of Real Property | 22                                             |
| 2.7                                         | CoBank Patronage  Capital                                    | 22                                             |
| 2.8                                         | Collateral  Assignments of Material Contracts                | 22                                             |
| 2.9                                         | Investment  Company Act                                      | 23                                             |
| 2.10                                        | Payment of  Obligations                                      | 23                                             |
| 2.11                                        | Environmental  Laws                                          | 23                                             |
| 2.12                                        | Creation or  Acquisition of Subsidiaries                     | 24                                             |
|                                        |                                                         |                                           |   |
| SECTION 3 NEGATIVE COVENANTS                | 24                                                           |
| 3.1                                         | Indebtedness                                                 | 25                                             |
| 3.2                                         | Liens and  Related Matters                                   | 25                                             |
| 3.3                                         | Investments                                                  | 25                                             |
| 3.4                                         | Contingent  Obligations                                      | 26                                             |
| 3.5                                         | Restricted  Junior Payments                                  | 27                                             |
| 3.6                                         | Restriction on  Fundamental Changes                          | 27                                             |
| 3.7                                         | Disposal of Assets  or Subsidiary Stock                      | 28                                             |
| 3.8                                         | Transactions  with Affiliates                                | 28                                             |
| 3.9                                         | Management Fees                                              | 29                                             |
| 3.10                                        | Conduct of  Business                                         | 29                                             |
| 3.11                                        | Fiscal Year                                                  | 29                                             |
| 3.12                                        | Modification of  Agreements                                  | 29                                             |
| 3.13                                        | Inconsistent  Agreements                                     | 29                                             |
|                                        |                                                         |                                           |   |
| SECTION 4 FINANCIAL COVENANTS AND REPORTING | 29                                                           |
| 4.1                                         | Total Leverage  Ratio                                        | 29                                             |
| 4.2                                         | Commnet Leverage  Ratio                                      | 30                                             |
| 4.3                                         | Debt Service  Coverage Ratio                                 | 30                                             |
| 4.4                                         | Equity to Assets  Ratio                                      | 30                                             |
| 4.5                                         | Financial  Statements and Other Reports                      | 30                                             |
|                                        | (A)                                                          | Quarterly  Financials; Other Quarterly Reports | 31     |
|                                        | (B)                                                          | Year-End Financials                            | 31     |
|                                        | (C)                                                          | Compliance  Certificates                       | 31     |
|                                        | (D)                                                          | Accountants’  Reliance Letter             | 31     |
|                                        | (E)                                                          | Accountants’  Reports                     | 31     |
|                                        | (F)                                                          | Management  Report                             | 31     |

 

----

 
|                                                | (G)                                                                                 | Budget                               | 32     |
|-----------------------------------------------------|-------------------------------------------------------------------------------------|--------------------------------------|--------|
|                                                | (H)                                                                                 | SEC Filings and  Press Releases      | 32     |
|                                                | (I)                                                                                 | Events of  Default, Etc.             | 32     |
|                                                | (J)                                                                                 | Litigation                           | 32     |
|                                                | (K)                                                                                 | Regulatory and  Other Notices        | 32     |
|                                                | (L)                                                                                 | Material Adverse  Effect             | 33     |
|                                                | (M)                                                                                 | Environmental  Notices               | 33     |
|                                                | (N)                                                                                 | ERISA Events                         | 33     |
|                                                | (O)                                                                                 | Other  Information                   | 33     |
| 4.6                                                 | Accounting  Terms; Utilization of GAAP for Purposes of Calculations Under Agreement | 33                                   |
|                                                |                                                                                |                                 |   |
| SECTION 5 REPRESENTATIONS AND WARRANTIES            | 34                                                                                  |
| 5.1                                                 | Disclosure                                                                          | 34                                   |
| 5.2                                                 | No Material  Adverse Effect                                                         | 34                                   |
| 5.3                                                 | Organization,  Powers, Authorization and Good Standing                              | 34                                   |
|                                                | (A)                                                                                 | Organization and  Powers             | 34     |
|                                                | (B)                                                                                 | Authorization;  Binding Obligation   | 34     |
|                                                | (C)                                                                                 | Qualification                        | 35     |
| 5.4                                                 | Compliance of  Agreement, Loan Documents and Borrowings with Applicable Law         | 35                                   |
| 5.5                                                 | Compliance with  Law; Governmental Approvals                                        | 35                                   |
| 5.6                                                 | Tax Returns and  Payments                                                           | 35                                   |
| 5.7                                                 | Environmental  Matters                                                              | 36                                   |
| 5.8                                                 | Financial  Statements                                                               | 36                                   |
| 5.9                                                 | Intellectual  Property                                                              | 36                                   |
| 5.10                                                | Litigation,  Investigations, Audits, Etc.                                           | 36                                   |
| 5.11                                                | Employee Labor  Matters                                                             | 37                                   |
| 5.12                                                | ERISA Compliance                                                                    | 37                                   |
| 5.13                                                | Communications  Regulatory Matters                                                  | 37                                   |
| 5.14                                                | Perfection and  Priority                                                            | 38                                   |
| 5.15                                                | Solvency                                                                            | 38                                   |
| 5.16                                                | Investment  Company Act                                                             | 38                                   |
| 5.17                                                | Material  Contracts                                                                 | 39                                   |
| 5.18                                                | Title to  Properties                                                                | 39                                   |
| 5.19                                                | Subsidiaries                                                                        | 39                                   |
| 5.20                                                | Transactions  with Affiliates                                                       | 39                                   |
| 5.21                                                | Patriot Act                                                                         | 39                                   |
|                                                |                                                                                |                                 |
| SECTION 6 EVENTS OF DEFAULT AND RIGHTS AND REMEDIES | 39                                                                                  |
| 6.1                                                 | Event of Default                                                                    | 39                                   |
|                                                | (A)                                                                                 | Payment                              | 39     |
|                                                | (B)                                                                                 | Default in Other  Agreements         | 40     |
|                                                | (C)                                                                                 | Breach of  Certain Provisions        | 40     |
|                                                | (D)                                                                                 | Breach of  Warranty                  | 40     |
|                                                | (E)                                                                                 | Other Defaults  Under Loan Documents | 40     |

 

----

 
|                                   | (F)                                                | Involuntary  Bankruptcy; Appointment of Receiver; Etc.          | 40     |
|----------------------------------------|----------------------------------------------------|-----------------------------------------------------------------|--------|
|                                   | (G)                                                | Voluntary  Bankruptcy; Appointment of Receiver; Etc.            | 40     |
|                                   | (H)                                                | Governmental  Liens                                             | 41     |
|                                   | (I)                                                | Judgment and  Attachments                                       | 41     |
|                                   | (J)                                                | Dissolution                                                     | 41     |
|                                   | (K)                                                | Solvency                                                        | 41     |
|                                   | (L)                                                | Injunction                                                      | 41     |
|                                   | (M)                                                | ERISA; Pension  Plans                                           | 41     |
|                                   | (N)                                                | Environmental  Matters                                          | 41     |
|                                   | (O)                                                | Invalidity of  Loan Documents                                   | 42     |
|                                   | (P)                                                | Damage; Strike;  Casualty                                       | 42     |
|                                   | (Q)                                                | Franchises,  Licenses, Permits and Contracts                    | 42     |
|                                   | (R)                                                | Failure of  Security                                            | 42     |
|                                   | (S)                                                | Change in  Control                                              | 42     |
|                                   | (T)                                                | Expropriation                                                   | 42     |
| 6.2                                    | Suspension of  Loan Commitments                    | 42                                                              |
| 6.3                                    | Acceleration                                       | 43                                                              |
| 6.4                                    | Rights of  Collection                              | 43                                                              |
| 6.5                                    | Consents                                           | 43                                                              |
| 6.6                                    | Performance by  Administrative Agent               | 43                                                              |
| 6.7                                    | Set Off and  Sharing of Payments                   | 44                                                              |
| 6.8                                    | Application of  Payments                           | 44                                                              |
| 6.9                                    | Adjustments                                        | 45                                                              |
|                                   |                                               |                                                            |   |
| SECTION 7 CONDITIONS TO LOANS          | 45                                                 |
| 7.1                                    | Conditions to  Initial Loan                        | 45                                                              |
|                                   | (A)                                                | Executed Loan  Documents                                        | 45     |
|                                   | (B)                                                | Control  Agreements                                             | 45     |
|                                   | (C)                                                | Closing  Certificates; Opinions                                 | 45     |
|                                   | (D)                                                | Collateral                                                      | 46     |
|                                   | (E)                                                | Consents                                                        | 47     |
|                                   | (F)                                                | Financial  Matters                                              | 47     |
|                                   | (G)                                                | Miscellaneous                                                   | 48     |
| 7.2                                    | Conditions to  All Loans                           | 48                                                              |
|                                   |                                               |                                                            |
| SECTION 8 ASSIGNMENT AND PARTICIPATION | 49                                                 |
| 8.1                                    | Assignments and  Participations in Loans and Notes | 49                                                              |
| 8.2                                    | Agent                                              | 51                                                              |
|                                   | (A)                                                | Appointment                                                     | 51     |
|                                   | (B)                                                | Nature of Duties                                                | 51     |
|                                   | (C)                                                | Rights,  Exculpation, Etc.                                      | 52     |
|                                   | (D)                                                | Reliance                                                        | 52     |
|                                   | (E)                                                | Indemnification                                                 | 53     |
|                                   | (F)                                                | CoBank,  Syndication Agent and Documentation Agent Individually | 53     |
|                                   | (G)                                                | Notice of  Default                                              | 53     |
|                                   | (H)                                                | Successor Agent                                                 | 54     |

 

----

 
|                    | (I)                                                                            | Collateral  Matters                                                     | 54     |
|-------------------------|--------------------------------------------------------------------------------|-------------------------------------------------------------------------|--------|
|                    | (J)                                                                            | Agency for  Perfection; Enforcement of Security by Administrative Agent | 55     |
|                    | (K)                                                                            | Dissemination of  Information                                           | 56     |
| 8.3                     | Amendments,  Consents and Waivers for Certain Actions                          | 56                                                                      |
| 8.4                     | Disbursement of  Funds                                                         | 56                                                                      |
| 8.5                     | Disbursements of  Advances; Payments                                           | 57                                                                      |
|                    | (A)                                                                            | Pro Rata  Treatment; Application                                        | 57     |
|                    | (B)                                                                            | Availability of  Lender’s Pro Rata Share                           | 57     |
|                    | (C)                                                                            | Return of  Payments                                                     | 57     |
|                    |                                                                           |                                                                    |   |
| SECTION 9 MISCELLANEOUS | 58                                                                             |
| 9.1                     | Indemnities                                                                    | 58                                                                      |
| 9.2                     | Amendments and  Waivers                                                        | 58                                                                      |
| 9.3                     | Notices                                                                        | 59                                                                      |
| 9.4                     | Failure or  Indulgence Not Waiver; Remedies Cumulative                         | 59                                                                      |
| 9.5                     | Marshaling;  Payments Set Aside                                                | 59                                                                      |
| 9.6                     | Severability                                                                   | 60                                                                      |
| 9.7                     | Lenders’  Obligations Several; Independent Nature of Lenders’ Rights | 60                                                                      |
| 9.8                     | Headings                                                                       | 60                                                                      |
| 9.9                     | Applicable Law                                                                 | 60                                                                      |
| 9.10                    | Successors and  Assigns                                                        | 60                                                                      |
| 9.11                    | No Fiduciary  Relationship                                                     | 60                                                                      |
| 9.12                    | Construction                                                                   | 60                                                                      |
| 9.13                    | Confidentiality                                                                | 60                                                                      |
| 9.14                    | Consent to  Jurisdiction and Service of Process                                | 61                                                                      |
| 9.15                    | Waiver of Jury  Trial                                                          | 62                                                                      |
| 9.16                    | Survival of  Warranties and Certain Agreements                                 | 62                                                                      |
| 9.17                    | Entire Agreement                                                               | 62                                                                      |
| 9.18                    | Counterparts; Effectiveness                                                    | 63                                                                      |
| 9.19                    | Effectiveness of  Amendment and Restatement; No Novation                       | 63                                                                      |
| 9.20                    | Patriot Act                                                                    | 63                                                                      |
|                    |                                                                           |                                                                    |
| SECTION 10 DEFINITIONS  | 63                                                                             |
| 10.1                    | Certain Defined  Terms                                                         | 63                                                                      |
| 10.2                    | Other  Definitional Provisions                                                 | 77                                                                      |

 

----

 
| SCHEDULES        |
|------------------|
|             |
| Schedule 3.3(C)  | Existing Investments |
| Schedule 3.8     | Transactions with Affiliates |
| Schedule 5.3(A)  | Jurisdiction of Organization |
| Schedule 5.3(C)  | Qualification to Transact Business |
| Schedule 5.10    | Litigation, Etc. |
| Schedule 5.11    | Labor Matters |
| Schedule 5.13(A) | License Information |
| Schedule 5.13(B) | Valid Licenses |
| Schedule 5.17    | Material Contracts |
| Schedule 5.19    | Subsidiaries |
|             |   |
| EXHIBITS         |
|             |   |
| Exhibit 1.3      | Form of Notice of Borrowing/Conversion/Continuation |
| Exhibit 4.5(C)   | Form of Compliance Certificate |
| Exhibit 10.1(A)  | Form of Lender Addition Agreement |
| Exhibit 10.1(B)  | Form of Revolver Note |
| Exhibit 10.1(C)  | Form of Term Note |

 

----

 

INDEX OF DEFINED TERMS

 
| **Defined Term**                 | ** ** | **Defined in Section** | ** **    |
|---------------------------------------|------------|----------------------------------|---------------|
| ** **                            | ** ** | ** **                       | ** **    | ** ** |
| Accounting  Changes                   |       |                             | §4.6     |   |
| Acquisition                           |       |                             | §10.1    |   |
| Act                                   |       |                             | §10.1    |   |
| Adjustment Date                       |       |                             | §10.1    |   |
| Administrative  Agent                 |       |                             | §10.1    |   |
| Affiliate                             |       |                             | §10.1    |   |
| Affected Lender                       |       |                             | §1.12    |   |
| Agreement                             |       |                             | §10.1    |   |
| Airplane  Indebtedness                |       |                             | §3.1(D)  |   |
| Amendment Date                        |       |                             | Preamble      |   |
| Applicable Law                        |       |                             | §10.1    |   |
| Arranger                              |       |                             | §10.1    |   |
| Asset  Disposition                    |       |                             | §10.1    |   |
| Available  Revolver Loan Commitment   |       |                             | §10.1    |   |
| Bankruptcy Code                       |       |                             | §10.1    |   |
| Base Rate                             |       |                             | §10.1    |   |
| Base Rate Loans                       |       |                             | §10.1    |   |
| Benefited Lender                      |       |                             | §6.9     |   |
| Bermuda Digital  Communications, Ltd. |       |                             | §10.1    |   |
| Borrower                              |       |                             | Preamble      |   |
| Breakage Fee                          |       |                             | §1.4(C)  |   |
| Budgets                               |       |                             | §4.5(G)  |   |
| Business Day                          |       |                             | §10.1    |   |
| Calculation  Period                   |       |                             | §10.1    |   |
| Capital Lease                         |       |                             | §10.1    |   |
| Cash Equivalents                      |       |                             | §10.1    |   |
| Certificate of  Exemption             |       |                             | §1.13(B) |   |
| Change of  Control                    |       |                             | §10.1    |   |
| Closing Date                          |       |                             | §10.1    |   |
| CoBank                                |       |                             | Preamble      |   |
| Collateral                            |       |                             | §10.1    |   |
| Collateral  Contract Assignments      |       |                             | §10.1    |   |
| Commnet                               |       |                             | Recitals      |   |
| Commnet Leverage  Ratio               |       |                             | §10.1    |   |
| Commnet  Operating Agreement          |       |                             | §10.1    |   |
| Communications  Act                   |       |                             | §10.1    |   |
| Communications  System                |       |                             | §10.1    |   |
| Compliance  Certificate               |       |                             | §4.5(C)  |   |
| Contingent  Obligation                |       |                             | §10.1    |   |
| Debt Service                          |       |                             | §10.1    |   |

 

----

 

Amended and Restated Credit Agreement/Atlantic Tele-Network, Inc.

 
| Debt Service  Coverage Ratio  |   |   | §10.1    |   |
|-------------------------------|--------|--------|---------------|--------|
| Default                       |   |   | §10.1    |   |
| EBITDA                        |   |   | §10.1    |   |
| Electing Lender               |   |   | §1.8     |   |
| Eligible  Assignee            |   |   | §10.1    |   |
| Environmental  Laws           |   |   | §10.1    |   |
| Equity                        |   |   | §10.1    |   |
| Equity to Assets  Ratio       |   |   | §10.1    |   |
| ERISA                         |   |   | §10.1    |   |
| ERISA Affiliate               |   |   | §10.1    |   |
| ERISA Event                   |   |   | §10.1    |   |
| Event of Default              |   |   | §6.1     |   |
| Excess Cash Flow              |   |   | §10.1    |   |
| Existing Credit  Agreement    |   |   | Recitals      |   |
| Facility(ies)                 |   |   | §10.1    |   |
| FCC                           |   |   | §10.1    |   |
| FDPA                          |   |   | §2.2     |   |
| Federal Funds  Rate           |   |   | §10.1    |   |
| Fixed Charge  Coverage Ratio  |   |   | §10.1    |   |
| Fixed Charges                 |   |   | §10.1    |   |
| Foreign Lender                |   |   | §1.13(B) |   |
| Franchise                     |   |   | §10.1    |   |
| Funding Date                  |   |   | §7.2     |   |
| GAAP                          |   |   | §10.1    |   |
| Governmental  Approvals       |   |   | §10.1    |   |
| Governmental  Authority       |   |   | §10.1    |   |
| Guaranty                      |   |   | §10.1    |   |
| Indebtedness                  |   |   | §10.1    |   |
| Indemnitees                   |   |   | §9.1     |   |
| Intellectual  Property Rights |   |   | §5.9     |   |
| Interest Expense              |   |   | §10.1    |   |
| Interest Period               |   |   | §10.1    |   |
| Interest Rate  Agreement      |   |   | §10.1    |   |
| Investment                    |   |   | §10.1    |   |
| Issuing Lender                |   |   | §10.1    |   |
| IRC                           |   |   | §10.1    |   |
| Lender(s)                     |   |   | §10.1    |   |
| Lender Addition  Agreement    |   |   | §10.1    |   |
| Letter(s) of  Credit          |   |   | §1.1(E)  |   |
| Letter of Credit  Liability   |   |   | §10.1    |   |
| Letter of  Non-Exemption      |   |   | §1.13(B) |   |
| LIBOR                         |   |   | §10.1    |   |
| LIBOR Interest  Period        |   |   | §1.2(B)  |   |
| LIBOR Loans                   |   |   | §10.1    |   |
| LIBOR Margin                  |   |   | §10.1    |   |

 

2

----

 
| Licenses                                     |   |   | §10.1         |   |
|----------------------------------------------|--------|--------|--------------------|--------|
| Lien                                         |   |   | §10.1         |   |
| Loan(s)                                      |   |   | §10.1         |   |
| Loan  Commitment(s)                          |   |   | §10.1         |   |
| Loan Documents                               |   |   | §10.1         |   |
| Material Adverse  Effect                     |   |   | §10.1         |   |
| Material  Contracts                          |   |   | §10.1         |   |
| Multi-employer  Plan                         |   |   | §10.1         |   |
| Net Proceeds                                 |   |   | §10.1         |   |
| Note(s)                                      |   |   | §10.1         |   |
| Notice of  Borrowing/Conversion/Continuation |   |   | §1.3(A)       |   |
| Obligations                                  |   |   | §10.1         |   |
| Patriot Act                                  |   |   | §9.20         |   |
| PBGC                                         |   |   | §10.1         |   |
| Pension Plan                                 |   |   | §10.1         |   |
| Permitted  Acquisition                       |   |   | §3.6          |   |
| Permitted  Encumbrances                      |   |   | §10.1         |   |
| Person                                       |   |   | §10.1         |   |
| Plan                                         |   |   | §10.1         |   |
| Pro Rata Share                               |   |   | §10.1         |   |
| PUC                                          |   |   | §10.1         |   |
| Purchase  Agreement                          |   |   | §10.1         |   |
| Put—Call                                |   |   | §3.5          |   |
| Quoted Rate                                  |   |   | §1.2(a)(i)(3) |   |
| Quoted Rate Loan                             |   |   | §10.1         |   |
| Quoted Rate  Interest Period                 |   |   | §1.2(a)(i)(3) |   |
| Replacement  Lender                          |   |   | §1.12(A)      |   |
| Representatives                              |   |   | §8.2(E)       |   |
| Related Interest  Rate Agreement             |   |   | §10.1         |   |
| Reportable Event                             |   |   | §10.1         |   |
| Requisite  Lenders                           |   |   | §10.1         |   |
| Restricted  Junior Payment                   |   |   | §10.1         |   |
| Revolver  Commitment Fee                     |   |   | §1.4(A)       |   |
| Revolver  Expiration Date                    |   |   | §10.1         |   |
| Revolver  Facility                           |   |   | §10.1         |   |
| Revolver Loan  Commitment                    |   |   | §10.1         |   |
| Revolver Loan(s)                             |   |   | §10.1         |   |
| Revolver Note(s)                             |   |   | §10.1         |   |
| SEC                                          |   |   | §4.5(H)       |   |
| Security  Agreements                         |   |   | §10.1         |   |
| Security  Documents                          |   |   | §10.1         |   |
| Security  Interest                           |   |   | §10.1         |   |
| Statement                                    |   |   | §4.5(B)       |   |
| Subsidiary                                   |   |   | §10.1         |   |
| Tax Liabilities                              |   |   | §1.13(A)      |   |

 

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| Term Loan                |   |   | §10.1   |   |
|--------------------------|--------|--------|--------------|--------|
| Term Loan  Commitment    |   |   | §10.1   |   |
| Term Loan  Facility      |   |   | §10.1   |   |
| Term Loan  Maturity Date |   |   | §10.1   |   |
| Term Loan  Note(s)       |   |   | §10.1   |   |
| Term Loans               |   |   | §10.1   |   |
| Total Leverage  Ratio    |   |   | §10.1   |   |
| UCP                      |   |   | §1.1(E) |   |

 

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**AMENDED AND RESTATED CREDITAGREEMENT**

 

This **AMENDED AND RESTATED CREDIT AGREEMENT** is entered intoas of August 31, 2007 (the “**Amendment Date**”),among **ATLANTIC TELE-NETWORK, INC.**,a Delaware corporation (“**Borrower**”),**COBANK, ACB** (individually, “**CoBank**”), as Administrative Agent,Arranger, an Issuing Lender and a Lender, **BANCOPOPULAR DE PUERTO RICO**, as an Issuing Lender and a Lender, and suchother Lenders as may from time to time become a party to this Agreement. Capitalizedterms used and not otherwise defined herein shall have the meanings given tothem in Subsection 10.1.

 

R E CI T A L S:

 

**WHEREAS,**Borrower, Administrative Agent and Lenders previously entered into a CreditAgreement, dated as of September 15, 2005 (the “**Existing Credit Agreement**”), pursuant to which Lendersextended certain financial accommodations to Borrower consisting of theRevolver Facility, and the Term Loan Facility, the proceeds of which areavailable to fund Borrower’s purchase of 95% of the outstanding membershipinterests of Commnet Wireless, LLC (“**Commnet**”),to repay in full all outstanding principal of and interest on all indebtednessof Commnet and its Subsidiaries, to provide funds for the capital expendituresof Borrower and its Subsidiaries, to provide funds for the working capitalneeds and other general corporate purposes of Borrower and its Subsidiaries,and to finance certain costs associated with the Facilities; and

 

**WHEREAS,**Borrower has secured all of its Obligations under the Loan Documents bygranting to Administrative Agent, for the benefit of itself and Lenders, afirst priority security interest in and lien upon all or substantially all ofits now owned or hereafter acquired personal and real property; and

 

**WHEREAS**,Borrower, Administrative Agent and Lenders have agreed to amend and restate theExisting Credit Agreement as described herein, to provide for Letters of Creditand for certain other amendments described herein.

 

**NOW, THEREFORE,**in consideration of the premises and the agreements, provisions and covenantsherein contained, and for other good and valuable consideration, the receiptand adequacy of which are hereby acknowledged, the parties hereto agree, andamend and restate the Existing Credit Agreement in its entirety, as follows:

 

# SECTION 1AMOUNTS AND TERMS OF FACILITIES

#  

1.1           Facilities.Subject to the terms and conditions of this Agreement and in reliance upon therepresentations, warranties and covenants of Borrower contained herein and inthe other Loan Documents:

 

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(A)          RevolverFacility. Each Lender, severally and not jointly, agrees to lend toBorrower, from time to time during the period commencing on the date allconditions precedent set forth in Subsections 7.1 and 7.2 are satisfied orwaived as provided herein and ending on the Business Day immediately precedingthe Revolver Expiration Date, its Pro Rata Share of each Revolver Loan; providedthat no Lender shall be required at any time to lend more than its respectivePro Rata Share of the Available Revolver Loan Commitment; and provided, further,that at any one time the aggregate principal amount of the Revolver Loansoutstanding may not exceed the Revolver Loan Commitment less the outstandingLetter of Credit Liability. Within the limits of and subject to the AvailableRevolver Loan Commitment, this Subsection 1.1(A) and Subsections 1.6, 1.7and 1.8, amounts borrowed under this Subsection 1.1(A) may be repaid orprepaid and, at any time up to and including the Business Day immediatelypreceding the Revolver Expiration Date, reborrowed.

 

(B)           TermLoan Facility. Each Lender, severally and not jointly, agrees to lend toBorrower, in a single advance on the Closing Date, its Pro Rata Share of theTerm Loan Commitment; provided all conditions precedent set forth inSubsections 7.1 and 7.2 are satisfied or waived as provided herein. Amountsborrowed under this Subsection 1.1(B) that are repaid or prepaid may not bereborrowed.

 

(C)           Notes.Borrower shall execute and deliver to each Lender a Revolver Note and a TermNote, dated the Closing Date, in the principal amount of such Lender’s Pro RataShare of the Revolver Loan Commitment and the Term Loan Commitment,respectively.

 

(D)          Advances.Loans will be made available by wire transfer of immediately available funds. Wiretransfers will be made to such account or accounts as may be authorized byBorrower. Advances under the Term Loan are only available on the Closing Date.

 

(E)           Lettersof Credit. The Revolver Loan Commitment shall, in addition to advances asRevolver Loans, be utilized, upon the request of Borrower, for the issuance ofirrevocable letters of credit (individually, a “**Letter of Credit**” and, collectively, the “**Letters of Credit**”) by an Issuing Lenderfor the account of Borrower or any of its Subsidiaries. Immediately upon theissuance by an Issuing Lender of a Letter of Credit, and without further actionon the part of Administrative Agent or any Lenders, each Lender shall be deemedto have purchased from such Issuing Lender a participation in such Letter ofCredit equal to such Lender’s Pro Rata Share of the Revolver Loan Commitment ofthe aggregate amount available to be drawn under such Letter of Credit. EachLetter of Credit shall reduce the amount available under the Revolver LoanCommitment by the maximum amount capable of being drawn under such Letter ofCredit.

 

###### (i)            Maximum Amount. The aggregateamount of Letter of Credit Liability with respect to all Letters of Creditoutstanding at any time for the account of Borrower or any of its Subsidiariesmay not exceed $1,000,000 and the aggregate amount of Letter of CreditLiability with respect to all Letters of Credit outstanding for the account ofBorrower or any of its Subsidiaries plus the aggregate principal amountof Revolver Loans outstanding at any time may not exceed the Revolver LoanCommitment.

######  

###### (ii)           Reimbursement. Borrower isirrevocably and unconditionally obligated without presentment, demand, protestor other formalities of any kind to reimburse

 

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###### an Issuing Lender in immediately availablefunds for any amounts paid by an Issuing Lender with respect to a Letter ofCredit issued hereunder for the account of Borrower or any of its Subsidiaries.Upon receipt from the beneficiary of any Letter of Credit of any notice ofdrawing under such Letter of Credit, the Issuing Lender shall notify Borrowerand Administrative Agent thereof. Not later than 11:00 a.m. on the date of anypayment by the Issuing Lender under a Letter of Credit, Borrower shallreimburse the Issuing Lender through Administrative Agent in the amount equalto the amount of such drawing. If Borrower fails to so reimburse the IssuingLender by such time, Borrower shall be deemed to have requested AdministrativeAgent to make a Revolver Loan in the amount of the payment made by such IssuingLender with respect to such Letter of Credit, provided that, after givingeffect to such Revolver Loan, the outstanding amount of all Revolver Loansshall not exceed the Revolver Loan Commitment. If the Letter of Credit ispayable in a foreign currency, the amount owed by Borrower in connection withsuch Letter of Credit shall equal the United States dollar equivalent of suchforeign currency (determined by the Administrative Agent in its reasonablediscretion) on the date such payment is made by such Issuing Lender. Allamounts paid by an Issuing Lender with respect to any Letter of Credit that arenot immediately repaid by Borrower or that are not repaid with a Revolver Loanshall bear interest at the sum of the Base Rate plus 1% per annum. EachLender agrees to fund its Pro Rata Share of any Revolver Loan made pursuant tothis Subsection 1.1(E)(2). In the event Administrative Agent elects not todebit Borrower’s account and Borrower fails to reimburse an Issuing Lender infull on the date of any payment in respect of a Letter of Credit issued for theaccount of Borrower or any of its Subsidiaries, Administrative Agent shallpromptly notify each Lender the amount of such unreimbursed payment and theaccrued interest thereon and each such Lender, on the next Business Day, shalldeliver to Administrative Agent an amount equal to its Pro Rata Share thereofin same day funds. Each Lender hereby absolutely and unconditionally agrees topay to each Issuing Lender upon demand by such Issuing Lender such Lender’s ProRata Share of each payment made by such Issuing Lender in respect of a Letterof Credit and not immediately reimbursed by Borrower. Each Lender acknowledgesand agrees that its obligations to acquire participations pursuant to thisSubsection 1.1(E)(2) in respect of Letters of Credit and to make the paymentsto each Issuing Lender required by the preceding sentence are absolute andunconditional and shall not be affected by any circumstance whatsoever,including the occurrence and continuance of a Default or an Event of Default orany failure by Borrower to satisfy any of the conditions set forth inSubsection 7.2. If any Lender fails to make available to an Issuing Lender theamount of such Lender’s Pro Rata Share of any payments made by such IssuingLender in respect of a Letter of Credit as provided in this Subsection1.1(E)(2), such Issuing Lender shall be entitled to recover such amount ondemand from such Lender together with interest at the Base Rate.

######  

###### (iii)          Conditions of Issuance of Lettersof Credit. In addition to all other terms and conditions set forth in thisAgreement, the issuance by an Issuing Lender of any Letter of Credit shall besubject to the conditions precedent that the Letter of Credit shall be in suchform, be for such amount, and contain such terms and conditions as arereasonably satisfactory to Administrative Agent and the Issuing Lender. Theexpiration date of each Letter of Credit must be on a date which is the earlierof one year from its date of issuance or

######  

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###### the 30th day before the date set forth inclause (ii) of the definition of the term “Revolver Loan Expiration Date,”or such other date as agreed to by both Administrative Agent and the IssuingLender, in their sole discretion.

######  

###### (iv)          Request for Letters of Credit. Borrowermust give Administrative Agent at least three Business Days’ prior writtennotice, which notice will be irrevocable, specifying the date a Letter ofCredit is requested to be issued and the amount and the currency in which suchLetter of Credit is payable, identifying the beneficiary and describing thenature of the transactions proposed to be supported thereby. Any noticerequesting the issuance of a Letter of Credit shall be accompanied by the formof the Letter of Credit to be provided by an Issuing Lender. Borrower must alsocomplete any application procedures and documents required by an Issuing Lenderin connection with the issuance of any Letter of Credit, including acertificate regarding Borrower’s compliance with the provisions of Subsection7.2 of this Agreement.

######  

###### (v)           Borrower Obligations Absolute.The obligations of Borrower under this Subsection 1.1(E) are irrevocable,will remain in full force and effect until the Issuing Lender and Lenders haveno further obligations to make any payments or disbursements under anycircumstances with respect to any Letter of Credit, shall be absolute andunconditional, shall not be subject to counterclaim, setoff or other defense orany other qualification or exception whatsoever and shall be paid in accordancewith the terms and conditions of this Agreement under all circumstances,including, without limitation, any of the following circumstances:

######  

(1)           Any lack of validity orenforceability of this Agreement, any of the other Loan Documents or anydocuments or instruments relating to any Letter of Credit;

 

(2)           Any change in the time, manner orplace of payment of, or in any other term of, all or any of the obligations inrespect of any Letter of Credit or any other amendment, modification or waiverof or any consent to or departure from any Letter of Credit, any documents orinstruments relating thereto, or any Loan Document in each case whether or notBorrower or its Subsidiaries has notice or knowledge thereof;

 

(3)           The existence of any claim, setoff,defense or other right that Borrower or its Subsidiaries may have at any timeagainst a beneficiary named in a Letter of Credit, any transferee of any Letterof Credit (or any Person for whom any such transferee may be acting),Administrative Agent, any Issuing Lender, any Lender, or any other Person,whether in connection with this Agreement, any other Loan Document, any Letterof Credit, the transactions contemplated hereby or any other related or unrelatedtransaction or transactions (including any underlying transaction betweenBorrower or its Subsidiaries and the beneficiary named in any such Letter ofCredit);

 

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(4)           Any draft, certificate or any otherdocument presented under any Letter of Credit proving to be forged, fraudulent,invalid or insufficient in any respect or any statement therein being untrue orinaccurate in any respect, any errors, omissions, interruptions or delays intransmission or delivery of any messages, by mail, telecopier or otherwise, orany errors in translation or in interpretation of technical terms;

 

(5)           Payment under any Letter of Creditagainst presentation of a demand, draft or certificate or other document whichdoes not comply with the terms of such Letter of Credit;

 

(6)           Any defense based upon the failure ofany drawing under any Letter of Credit to conform to the terms of such Letterof Credit (provided that any draft, certificate or other documentpresented pursuant to such Letter of Credit appears on its face to comply withthe terms thereof), any nonapplication or misapplication by the beneficiary orany transferee of the proceeds of such drawing or any other act or omission ofsuch beneficiary or transferee in connection with such Letter of Credit;

 

(7)           The exchange, release, surrender orimpairment of any collateral or other security for the obligations;

 

(8)           The occurrence of any Default orEvent of Default; or

 

(9)           Any other circumstance or eventwhatsoever, including, without limitation, any other circumstance that mightotherwise constitute a defense available to, or a discharge of, Borrower, anySubsidiary or a guarantor.

 

Any actiontaken or omitted to be taken by an Issuing Lender under or in connection withany Letter of Credit, if taken or omitted in the absence of gross negligence orwillful misconduct, is binding upon Borrower and its Subsidiaries and shall notcreate or result in any liability of such Issuing Lender to Borrower or any ofits Subsidiaries. It is expressly agreed that, for purposes of determiningwhether a wrongful payment under a Letter of Credit resulted from such IssuingLender’s gross negligence or willful misconduct, none of the following shall bedeemed to constitute gross negligence or willful misconduct by such IssuingLender: (i)  Issuing Lender’s acceptance of documents that appear on theirface to comply with the terms of such Letter of Credit, without responsibilityfor further investigation, (ii)  Issuing Lender’s exclusive reliance onthe documents presented to it under such Letter of Credit as to any and allmatters set forth therein, including the amount of any draft presented undersuch Letter of Credit, whether or not the amount due to the beneficiarythereunder equals the amount of such draft and whether or not any documentpresented pursuant to such Letter of Credit proves to be insufficient in anyrespect (so long as such document appears on its face to comply with the termsof such Letter of Credit), and whether or not any other statement or any otherdocument presented pursuant to such Letter of Credit proves to be forged orinvalid or any statement therein proves to be inaccurate or untrue in anyrespect whatsoever, and

 

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(iii) anynoncompliance in any immaterial respect of the documents presented under suchLetter of Credit with the terms thereof.

 

###### (vi)          Obligations of Issuing Lenders.Each Issuing Lender (other than CoBank) hereby agrees that it will not issue aLetter of Credit hereunder until it has provided Administrative Agent withwritten notice specifying the amount and intended issuance date of such Letterof Credit and Administrative Agent has returned a written acknowledgment ofsuch notice to Issuing Lender. Each Issuing Lender (other than CoBank) furtheragrees to provide to Administrative Agent: (a) a copy of each Letter of Creditissued by such Issuing Lender promptly after its issuance; (ii) a monthlyreport summarizing available amounts under Letters of Credit issued by suchIssuing Lender, the dates and amounts of any draws under such Letters ofCredit, the effective date of any increase or decrease in the face amount ofany Letters of Credit during such month and the amount of any unreimburseddraws under such Letters of Credit; and (iii) such additional informationreasonably requested by Administrative Agent from time to time with respect tothe Letters of Credit issued by such Issuing Lender.

######  

###### (vii)         UCP. The Uniform Customs andPractice for Documentary Credits as most recently published from time to timeby the International Chamber of Commerce (the “**UCP**”) is hereby incorporated in this Agreement and shall bedeemed incorporated by this reference into each Letter of Credit issuedpursuant to this Agreement. The terms and conditions of the UCP shall bebinding on the parties to this Agreement and each beneficiary of any Letter ofCredit issued pursuant to this Agreement.

######  

1.2           Interest.

 

(A)          InterestOptions.

 

###### (i)            From the date each Loan is made,based upon the election of Borrower, at such time and from time to timethereafter (as provided in Subsection 1.3 and subject to the conditionsset forth in such Subsection and Subsection 1.2(G)), each such Loan shallaccrue interest as follows:

######  

(1)           as a Base Rate Loan, at the sum ofthe Base Rate plus 1% per annum; or

 

(2)           as a LIBOR Loan, for the applicableLIBOR Interest Period, at the sum of LIBOR plus the LIBOR Margin applicable to such Loan from time to time asprovided in Subsection 1.2(B); or

 

(3)           for the Term Loan only, as a QuotedRate Loan, at a fixed annual interest rate (the “**Quoted Rate**”) to be quoted by CoBank in its sole and absolutediscretion. Under this option, the interest rate may be fixed for periodsranging from 180 days to the Term Loan Maturity Date (each such period, a “**Quoted Rate Interest Period**”); provided,however, that a Quoted Rate Interest Period may only expire on aBusiness Day; and provided, however, further, that thereinitially shall be 

 

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a Quoted RateInterest Period for the full amount of the Term Loan from the Closing Date tothe Term Loan Maturity Date at a fixed per annum interest rate of 5.85%; and

 

###### (ii)           Except as otherwise provided inSubsections 1.2(E) and 6.6, interest on all other Obligations not paid when duewill accrue at the Base Rate plus 1% per annum.

######  

(B)           ApplicableMargins.

 

Initially, and continuing through the day immediately preceding thefirst Adjustment Date occurring on or after September 30, 2005 on which Borrowerdemonstrates that a change in the LIBOR Margin is warranted and requests suchchange in writing, the LIBOR Margin shall be 1.50%. Commencing on suchAdjustment Date, the applicable Base Rate Margin and LIBOR Margin for anyRevolver Loan and any Term Loan shall be for each Calculation Period the perannum percentage set forth in the pricing table below opposite the applicableTotal Leverage Ratio of Borrower, determined on a consolidated basis forBorrower and its Subsidiaries; provided, that effective (i) upon theoccurrence of an Event of Default and until such Event of Default is cured orwaived or (ii) in the event that Administrative Agent shall not receive thefinancial statements and Compliance Certificate required pursuant toSubsections 4.5(A), 4.5(B) and 4.5(C) when due, from such due date and untilthe fifth Business Day following Administrative Agent’s receipt of such overduefinancial statements and Compliance Certificate (and in the event a decrease inthe applicable margin is then warranted, receipt of Borrower’s written requestto decrease such margin), the LIBOR Rate Margin shall be 1.50% per annum.

 

PRICING TABLE — RevolverLoan and Term Loan 

 
| **Total Leverage Ratio** | ** ** | **LIBOR Margin** | ** ** |
|------------------------------------|------------|-----------------------|------------|
| >  1.5x                         |       | 1.50                  | %          |
| < 1.5x                          |       | 1.25                  | %          |

 

(C)           InterestPeriods. Each LIBOR Loan may be obtained for a one, two, three, six, nineor 12 month period (each such period being an “**LIBOR Interest Period**”). With respect to all LIBOR Loans:

 

###### (i)            the LIBOR Interest Period willcommence on the date that the LIBOR Loan is made or the date on which anyportion of the Base Rate Loan is converted into a LIBOR Loan, or, in the caseof immediately successive Interest Periods, each successive Interest Periodshall commence on the day on which the immediately preceding LIBOR InterestPeriod expires;

######  

###### (ii)           if the LIBOR Interest Period wouldotherwise expire on a day that is not a Business Day, then it will expire onthe next Business Day; provided, that if any LIBOR Interest Period wouldotherwise expire on a day that is not a Business Day and such day is the lastBusiness Day of a calendar month, such LIBOR Interest Period shall expire onthe Business Day next preceding such day;

 

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###### (iii)          any LIBOR Interest Period that beginson the last Business Day of a calendar month or on a day for which there is nonumerically corresponding day in the last calendar month in such LIBOR InterestPeriod shall end on the last Business Day of the last calendar month in suchLIBOR Interest Period; and

######  

###### (iv)          no LIBOR Interest Period shall beselected that extends beyond the Revolver Expiration Date or the Term LoanMaturity Date.

######  

(D)          Calculationand Payment. Interest on Loans including amounts due under Subsection 1.4,shall be calculated on the basis of a 360-day year for the actual number ofdays elapsed. The date of funding or conversion to a Base Rate Loan and thefirst day of an Interest Period shall be included in the calculation ofinterest. The date of payment (as determined in Subsection 1.5) of any Loan andthe last day of an Interest Period shall be excluded from the calculation ofinterest; provided, if a Loan is repaid on the same day that it is made,one day’s interest shall be charged.

 

Interest accruing on Base Rate Loans and Quoted RateLoans****is payable in arrears oneach of the following dates or events: (i) the last day of each calendarquarter; (ii) the prepayment of such Loan (or portion thereof), to the extentaccrued on the principal prepaid; and (iii) the Term Loan Maturity Date or theRevolver Expiration Date, as the case may be, whether by acceleration orotherwise. Interest accruing on each LIBOR Loan is payable in arrears on eachof the following dates or events: (i) the last day of each applicable LIBORInterest Period; (ii) if the LIBOR Interest Period is longer than three months,on each three-month anniversary of the commencement date of such LIBOR InterestPeriod; (iii) the prepayment of such Loan (or portion thereof), to the extentaccrued on the principal prepaid; and (iv) the Term Loan Maturity Date or theRevolver Expiration Date, as the case may be, whether by acceleration orotherwise.

 

(E)           DefaultRate of Interest. At the election of Administrative Agent or RequisiteLenders, after the occurrence of an Event of Default and for so long as itcontinues, all Loans and other Obligations shall bear interest at rates thatare 2% in excess of the rates otherwise in effect, including, withoutlimitation, rates in effect pursuant to the proviso in the second sentence ofSubsection 1.2(B), with respect to such Loans and other Obligations.

 

(F)           ExcessInterest. Notwithstanding anything to the contrary set forth herein, theaggregate interest, fees and other amounts required to be paid by Borrower toLenders or any Lender hereunder are hereby expressly limited so that in nocontingency or event whatsoever, whether by reason of acceleration of maturityof the Indebtedness evidenced hereby or otherwise, shall the amount paid oragreed to be paid to Lenders or any Lender for the use or the forbearance ofthe Indebtedness or Obligations evidenced hereby exceed the maximum permissibleunder Applicable Law. If under or from any circumstances whatsoever,fulfillment of any provision hereof or of any of the other Loan Documents atthe time of performance of such provision shall be due, shall involve exceedingthe limit of such validity prescribed by Applicable Law then the obligation tobe fulfilled shall automatically be reduced to the limit of such validity andif under or from circumstances whatsoever Lenders or any Lender should everreceive as interest any amount which would exceed the highest lawful rate, theamount of such interest that is excessive shall be applied to the reduction ofthe principal balance of the Obligations evidenced hereby and not to thepayment of interest.

 

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Additionally, should the method used for calculating interest (i.e.,using a 360-day year) be unlawful, such calculation method shall beautomatically changed to a 365-6-day year or such other lawful calculationmethod as is reasonably acceptable to Administrative Agent. This provisionshall control every other provision of this Agreement and all provisions ofevery other Loan Document.

 

(G)           Selection,Conversion or Continuation of Loans; LIBOR and Quoted Rate Availability. Providedthat no Default or Event of Default has occurred and is then continuing,Borrower shall have the option to (i) select all or any part of a new borrowingto be a Base Rate Loan, a LIBOR Loan or, only under the Term Loan Facility, aQuoted Rate Loan, in the case of a Base Rate Loan in a principal amount equalto at least $100,000, in the case of a LIBOR Loan in a principal amount equalto $1,000,000 or any whole multiple of $500,000 in excess thereof, or, onlyunder the Term Loan Facility, a Quoted Rate Loan in a principal amount equal to$5,000,000 or any whole multiple of $1,000,000 in excess thereof,(ii) convert at any time all or any portion of a Base Rate Loan in aprincipal amount equal to $1,000,000 or any whole multiple of $500,000 inexcess thereof into a LIBOR Loan or, only under the Term Loan Facility, in aprincipal amount equal to $5,000,000 or any whole multiple of $1,000,000 inexcess thereof into a Quoted Rate Loan, (iii) upon the expiration of itsInterest Period, convert all or any part of any LIBOR Loan or, only under theTerm Loan Facility, a Quoted Rate Loan into a Base Rate Loan, and(iv) upon the expiration of its Interest Period, continue any LIBOR Loanor, only under the Term Loan Facility, a Quoted Rate Loan into one or moreLIBOR Loans in a principal amount of $1,000,000 or any whole multiple of$500,000 in excess thereof or, only under the Term Loan Facility, one or moreQuoted Rate Loans in a principal amount of $5,000,000 or any whole multiple of$1,000,000 in excess thereof, for such new Interest Period(s) as selected byBorrower. Each LIBOR Loan shall be made under any one of the Revolver Facilityor the Term Loan Facility, but may not be made under more than one Facility concurrently.During any period in which any Default or Event of Default is continuing, asthe Interest Periods for LIBOR Loans or Quoted Rate Loans then in effectexpire, such Loans shall be converted into a Base Rate Loan and the LIBOR andQuoted Rate options will not be available to Borrower until all Defaults andEvents of Default are cured or waived. In the event Borrower fails to elect aLIBOR Loan or Quoted Rate Loan upon any advance hereunder or upon thetermination of any Interest Period, Borrower shall be deemed to have elected tohave such amount constitute a Base Rate Loan. There shall be no more than anaggregate of five LIBOR Loans and Quoted Rate Loans Outstanding at any onetime.

 

1.3           Noticeof Borrowing, Conversion or Continuation of Loans. Whenever Borrowerdesires to request a Loan pursuant to Subsection 1.1(A) or (B)****or to convert or continue Loans pursuantto Subsection 1.2(G), Borrower shall give Administrative Agent irrevocableprior written notice in the form attached hereto as Exhibit 1.3 (a “**Notice of Borrowing/Conversion/Continuation**”)not later than 11:00 a.m. (Denver, Colorado time) three Business Days beforethe proposed borrowing, conversion or continuation is to be effective. EachNotice of Borrowing/Conversion/Continuation shall specify (i) the Loan (orportion thereof) to be advanced, converted or continued and, with respect toany LIBOR Loan or Quoted Rate Loan to be converted or continued, the last dayof the current Interest Period therefor, (ii) the effective date of suchborrowing, conversion or continuation (which shall be a Business Day),(iii) the principal amount of such Loan to be borrowed, converted orcontinued, (iv) the Interest Period to be applicable to any new LIBOR Loanor Quoted Rate Loan, and (v) the Facility under which such borrowing,conversion or continuation is to be made.

 

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Administrative Agent shall give each Lender prompt written notice ofany Notice of Borrowing/Conversion/Continuation given on by Borrower.

 

1.4           Feesand Expenses.

 

(A)          UnusedCommitment Fees. From the Closing Date, Borrower shall be obligated to payAdministrative Agent, for the benefit of all Lenders (based upon theirrespective Pro Rata Shares of the Revolver Loan Commitment), a fee (the “**Revolver Commitment Fee**”) in an amountequal to (i) the Revolver Loan Commitment less the sum of (a) theaverage daily outstanding balance of Revolver Loans plus (b) theaverage daily outstanding Letter of Credit Liability, in each case during thepreceding calendar quarter multipliedby (ii) .375%calculated on the basis of a 360-day year for the actual number of days elapsed.Such fees are to be paid quarterly in arrears on the last day of each calendarquarter for such calendar quarter (or portion thereof), with the final suchpayment due on the Revolver Expiration Date.

 

(B)           CertainOther Fees. Borrower shall be obligated to pay to CoBank, individually,fees in the amounts and at the times specified in the letter agreement datedJuly 22, 2005, between Borrower and CoBank and to the Administrative Agent feesin the amounts specified in the letter agreement dated as of the AmendmentDate, between Borrower and Administrative Agent.

 

(C)           BreakageFee. Upon any repayment or payment of a LIBOR Loan or Quoted Rate Loan onany day that is not the last day of the Interest Period applicable thereto(regardless of the source of such repayment or prepayment and whethervoluntary, mandatory, by acceleration or otherwise), Borrower shall beobligated to pay Administrative Agent, for the benefit of all affected Lenders,an amount (the “**Breakage Fee**”)equal to the present value of any losses, expenses and liabilities (includingany loss (including interest paid) sustained by each such affected Lender inconnection with the reemployment of such funds) that any such affected Lendermay sustain as a result of the payment of such LIBOR Loan or Quoted Rate Loanon such day. For purposes of calculating amounts payable by Borrower to Lendersunder this Subsection 1.4(C), each LIBOR Loan or Quoted Rate Loan made by aLender (and each related reserve, special deposit or similar requirement) shallbe conclusively deemed to have been funded at the LIBOR rate for such LIBORLoan or Quoted Rate for such Quoted Rate Loan by a matching deposit or otherborrowing in the interbank eurocurrency market for a comparable amount and fora comparable period, whether or not such LIBOR Loan or Quoted Rate Loan is infact so funded. In addition, upon any repayment or prepayment of a LIBOR Loanor Quoted Rate Loan on any day that is not the last day of the Interest Periodapplicable thereto (regardless of the source of such repayment or prepaymentand whether voluntary, mandatory, by acceleration or otherwise), Borrower shallbe obligated to pay Administrative Agent, not for the benefit of Lenders, anadministrative fee of $300.

 

(D)          Expensesand Attorneys’ Fees. In addition to fees due under Subsections 1.4(A)and 1.4(B), Borrower agrees to pay promptly all reasonable fees, costs andexpenses (including those of attorneys) incurred by Administrative Agent inconnection with (i) any matters contemplated by or arising out of the LoanDocuments, (ii) the continued administration of the Loan Documents,including any such fees, costs and expenses incurred in perfecting,maintaining, determining the priority of and releasing any security and any taxpayable in connection

 

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with any Loan Documents and any amendments, modifications and waivers. Inaddition to fees due under Subsections 1.4(A) and (B), Borrower shall alsoreimburse on demand each of Administrative Agent and Banco Popular de PuertoRico****for its expenses (includingreasonable attorneys’ fees and expenses) incurred in connection with thedocumenting and closing the transactions contemplated herein. In addition tofees due under Subsections 1.4(A) and (B), Borrower agrees to pay promptly(i) all reasonable fees, costs and expenses incurred by Administrative andLenders in connection with any amendment, supplement, waiver or modification ofany of the Loan Documents and (ii) all reasonable out-of-pocket fees, costs andexpenses incurred by each of Administrative Agent****and Lenders in connection with any Default or Event ofDefault and any enforcement of collection proceeding resulting therefrom or anyworkout or restructuring of any of the transactions hereunder or contemplatedthereby or any action to enforce any Loan Document or to collect any paymentsdue from Borrower. All fees, costs and expenses for which Borrower isresponsible under this Subsection 1.4(D) shall be deemed part of theObligations when incurred, payable upon demand and in accordance with thesecond paragraph of Subsection 1.5 and shall be secured by the Collateral.

 

(E)           Letterof Credit Fees. From the Closing Date, Borrower shall pay AdministrativeAgent for the account of all Lenders committed to make Revolver Loans (basedupon their respective Pro Rata Shares) a fee for each Letter of Credit from thedate of issuance to the date of termination in an amount equal to theapplicable LIBOR Margin per annum multiplied by the face amount of such Letterof Credit. Such fee shall be payable to Administrative Agent for the benefit ofall Lenders committed to make Revolver Loans (based upon their respective ProRata Shares). Such fee is to be paid quarterly in arrears on the last day ofeach calendar quarter and the termination of the Letter of Credit. With respectto each Letter of Credit, Borrower shall also pay Administrative Agent, for thebenefit of the Issuing Lender issuing such Letter of Credit, an issuance feeequal to the greater of (1) $100 or (ii) 0.125% of the face amount of suchLetter of Credit, which amount shall be paid upon the date of issuance and, ifthe expiration date of such Letter of Credit is later than one year from itsdate of issuance, upon each anniversary of the date of issuance during the termof such Letter of Credit.

 

1.5           Payments.All payments by Borrower of the Obligations shall be made in same day funds anddelivered to Administrative Agent, for the benefit of itself and Lenders, asapplicable, by wire transfer to the following account or such other place asAdministrative Agent may from time to time designate:

 

CoBank, ACBGreenwood Village, ColoradoABA Number 3070-8875-4Reference:  CoBank for the benefit of ATN

 

Borrower shall receive credit on the day of receipt for funds receivedby Administrative Agent by 11:00 a.m. (Denver, Colorado time) on anyBusiness Day. Funds received on any Business Day after such time shall bedeemed to have been paid on the next Business Day. Whenever any payment to bemade hereunder shall be stated to be due on a day that is not a Business Day,the payment shall be due on the next succeeding Business Day and such extensionof time shall be included in the computation of the amount of interest and feesdue hereunder.

 

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Borrower authorizes Lenders to make (but Lenders shallnot be obligated to make) a Base Rate Loan under the Revolver Facility, on thebasis of the Lenders’ respective Pro Rata Shares of the Revolver Facility, forthe payment of interest, commitment fees, Breakage Fees and any other costs andexpenses due hereunder at any time during the continuance of an Event of Defaultwithout prior notice to Borrower, provided that Administrative Agent shall giveBorrower notice thereof promptly thereafter although the failure ofAdministrative Agent to give such notice shall not affect the validity of suchBase Rate Loan.

 

To the extent Borrower or any other party or Personmakes a payment or payments to Administrative Agent for the ratable benefit ofLenders or for the benefit of Administrative Agent in its individual capacity,which payments or any part thereof are subsequently invalidated, declared to befraudulent or preferential, set aside and/or required to be repaid to atrustee, receiver or any other party under any bankruptcy law, state or federallaw, common law or equitable cause, or any combination of the foregoing (whetherby demand, litigation, settlement or otherwise), then, to the extent of suchpayment or proceeds repaid, the Obligations or part thereof intended to besatisfied shall be revived and continued in full force and effect as if suchpayment or proceeds had not been received by Administrative Agent.

 

Each payment received by Administrative Agent underthis Agreement or any Note for account of any Lender shall be remitted byAdministrative Agent to such Lender promptly after Administrative Agent’sreceipt thereof, and such remittance shall be made in immediately availablefunds for the account of such Lender for the Loans or other obligation inrespect of which such payment is made.

 

1.6           Repaymentsof Loans and Reduction of the Revolver Loan Commitment.

 

(A)          ScheduledTermination of Revolver Loan Commitment and Repayments of the Term Loan.

 

##### (1)           Scheduled Termination of RevolverLoan Commitment. In addition to any reduction pursuant to Subsections1.6(B) and 1.6(C), the Revolver Loan Commitment shall be permanently terminatedin full on the Revolver Expiration Date, and any outstanding principal balanceof the Revolver Loans not sooner due and payable will become due and payable onthe Revolver Expiration Date.

#####  

##### (2)           Scheduled Repayments of the TermLoan. In addition to any repayments pursuant to Subsections 1.7 and 1.8,the outstanding principal balance of the Term Loan not sooner due and payablewill become due and payable on the Term Loan Maturity Date.

#####  

(B)           ReductionsResulting From Mandatory Repayments. The Revolver Loan Commitment also willbe permanently reduced to the extent and in the amount that Borrower isrequired, pursuant to Subsection 1.8, to apply mandatory repayments to be madepursuant to Subsection 1.7(B), (C) and (D) to the Revolver Facility (whether ornot any Revolver Loans are then outstanding and available to be repaid). Allreductions provided for in this Subsection 1.6(B) shall be in addition tothe voluntary reductions provided for in Subsection 1.6(C) and, accordingly,may

 

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result in the termination of the Revolver Loan Commitment prior to thedate set forth in clause (ii) of the definition of the term RevolverExpiration Date.

 

(C)           VoluntaryReduction of the Revolver Loan Commitment. Borrower shall have the right,upon at least three Business Days’ prior written notice to AdministrativeAgent, to terminate or permanently reduce the then unused portion of theRevolver Loan Commitment. Each partial reduction shall be in a minimum amountof at least $250,000, or any whole multiple thereof in excess thereof, andshall be applied as to each Lender based upon its Pro Rata Share. Notwithstandingthe foregoing, no reduction shall be permitted if, after giving effect theretoand to any prepayment made in connection therewith, the aggregate principalbalance of the Revolver Loans then outstanding under the Revolver Facility plusthe amount of the Letter of Credit Liability would exceed the Revolver LoanCommitment as so reduced. All reductions elected under this Subsection 1.6(C)shall be in addition to the reductions in the Revolver Loan Commitment providedfor in Subsections 1.6(A)(1) and 1.6(B) and, accordingly, may result in thetermination of the Revolver Loan Commitment prior to the date set forth inclause (ii) of the definition of the term Revolver Expiration Date.

 

(D)          MandatoryRepayments. If at any time the aggregate outstanding amount of RevolverLoans plus the amount of the Letter of Credit Liability exceeds theRevolver Loan Commitment, Borrower shall be obligated to repay promptly theRevolver Loans or reduce the Letter of Credit Liability pursuant to Subsection1.16 in an amount at least sufficient to reduce the aggregate principalbalance of such Revolver Loans then outstanding plus the amount of theLetter of Credit Liability to the amount of the Revolver Loan Commitment, anduntil such repayment is made, Lenders shall not be obligated to make anyadditional Revolver Loans. Any repayments pursuant to this Subsection 1.6(D)shall be paid and applied in accordance with Subsection 1.8 and must beaccompanied by accrued interest on the amount repaid and any applicableBreakage Fees.

 

1.7           VoluntaryPrepayments and Other Mandatory Repayments.

 

(A)          VoluntaryPrepayment of Loans. Subject to the provisions of Subsection 1.8 and thenotice requirement in the following sentence, at any time, Borrower may prepay(i) the Base Rate Loan, in whole or in part, without penalty, and (ii) anyLIBOR Loan or Quoted Rate Loan, in whole or in part, upon payment of applicableBreakage Fees. Notice of any prepayment of (a) a Base Rate Loan shall be givennot later than 11 a.m. (Denver, Colorado time) on the Business Day immediatelypreceding the date of prepayment, and (b) a LIBOR Loan or Quoted Rate Loanshall be given not later than 11:00 a.m. (Denver, Colorado time) on thethird Business Day immediately preceding the date of prepayment. All partialprepayments shall be in a minimum amount of at least $250,000, or any wholemultiple thereof in excess thereof (or the entire remaining balance of theapplicable Loan Commitment), and shall be paid and applied in accordance withSubsection 1.8. All prepayment notices shall be irrevocable. All prepaymentsshall be accompanied by accrued interest on the amount prepaid and anyapplicable Breakage Fees.

 

(B)           Repaymentsfrom Insurance Proceeds. Immediately upon receipt thereof, Borrower shallbe obligated to repay the Loans (or reduce the Letter of Credit Liabilitypursuant to Subsection 1.16) in an amount equal to all Net Proceedsreceived by Borrower or any Subsidiary of Borrower that are insurance proceedsfrom any Asset Disposition (which Asset Disposition, together 

 

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with all other such Asset Dispositions covered by this Subsection1.7(B), exceeds $3,000,000 in the aggregate over the term of this Agreement); provided,however, that if no Default or Event of Default has occurred and iscontinuing, Borrower shall not be required to repay the Loans with the NetProceeds if Borrower or such Subsidiary (i) has previously applied cash or (ii)applies such Net Proceeds, to repair or replace the lost, damaged or destroyedassets within 180 days of receipt by Borrower or such Subsidiary of such NetProceeds. All such repayments shall be paid and applied in accordance withSubsection 1.8. All prepayments shall be accompanied by accrued interest on theamount prepaid and any applicable Breakage Fees.

 

(C)           Repaymentsfrom Certain Asset Dispositions. Immediately upon receipt thereof, Borrowershall be obligated to repay the Loans (or reduce the Letter of Credit Liabilitypursuant to Subsection 1.16) in an amount equal to all Net Proceeds byBorrower or any Subsidiary of Borrower that are from Asset Dispositions, otherthan insurance proceeds or from Asset Dispositions permitted pursuant toSubsection 3.7; provided, however, that if (i) no Default orEvent of Default has occurred and is continuing and (ii) the aggregate of allsuch Net Proceeds during the 12-month period ending on the date of suchproposed reinvestment does not exceed 5% of Borrower’s then amount ofconsolidated assets, Borrower shall not be required to repay the Loans with theNet Proceeds if Borrower or such Subsidiary applies such Net Proceeds toacquire equipment or other assets that are used or useful in the business ofBorrower and or such Subsidiary within 180 days of receipt by Borrower or suchSubsidiary of such Net Proceeds. All such repayments shall be paid and appliedin accordance with Subsection 1.8. All prepayments shall be accompanied byaccrued interest on the amount prepaid and any applicable Breakage Fees.

 

(D)          Repaymentsfrom Debt Issuances. Immediately upon receipt by Borrower or any Subsidiaryof Borrower of Net Proceeds relating to the issuance by Borrower or anySubsidiary of Borrower of any public or private debt (other than pursuant toSubsection 3.1), Borrower shall be obligated to repay the Loans (or reduce theLetter of Credit Liability pursuant to Subsection 1.16) in an amountequal to such Net Proceeds. All such repayments shall be paid and applied inaccordance with Subsection 1.8. All prepayments shall be accompanied by accruedinterest on the amount prepaid and any applicable Breakage Fees.

 

1.8           Applicationof Prepayments and Repayments; Payment of Breakage Fees, Etc. Absent aprior written direction from Borrower to apply any repayment made pursuant toSubsection 1.7(B) through (D) to the principal balance of the Term Loanfacility, each such repayment shall be first applied to reduce the RevolverLoan Commitment (and, to the extent as a result thereof the Revolver LoanCommitment exceeds the then outstanding principal balance of the Revolver Loansplus the amount of the Letter of Credit Liability, to repay the RevolverLoans (or reduce the Letter of Credit Liability pursuant to Subsection 1.16)).After the Revolver Loan Facility is repaid and the Revolver Loan Commitmentreduced in full, each repayment made pursuant to Subsection 1.7(B) through (D)shall be applied to the principal balance of Term Loan Facility. All repaymentsmade pursuant to Subsections 1.6 and 1.7 shall first be applied to a Base RateLoan or such of the LIBOR Loans or Quoted Rate Loans as Borrower shall directin writing and, in the absence of such direction, shall first be applied to aBase Rate Loan and then to such LIBOR Loans and then to such Quoted Rate Loansas Administrative Agent shall select. All prepayments and repayments requiredor permitted hereunder shall be accompanied by payment of all applicableBreakage Fees and accrued interest on

 

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the amount prepaid or repaid. All prepayments and repayments applied tothe Term Loan shall be applied to principal installments in the inverse orderof maturity.

 

1.9           LoanAccounts. Administrative Agent will maintain loan account records for (i)all Loans, interest charges and payments thereof, (ii) all Letter ofCredit Liability, (iii) the charging and payment of all fees, costs andexpenses and (iv) all other debits and credits pursuant to this Agreement. Thebalance in the loan accounts shall be presumptive evidence of the amounts dueand owing to Lenders, absent manifest error, provided that any failureby Administrative Agent to maintain such records shall not limit or affect Borrower’sobligation to pay. During the continuance of an Event of Default, Borrowerirrevocably waives the right to direct the application of any and all paymentsand Borrower hereby irrevocably agrees that Administrative Agent shall have thecontinuing exclusive right to apply and reapply payments to any of theObligations in any manner it deems appropriate.

 

1.10         Changesin LIBOR Rate Availability. (A)  Ifwith respect to any proposed LIBOR Interest Period, Administrative Agent or anyLender (after consultation with Administrative Agent) determines that depositsin dollars (in the applicable amount) are not being offered in the relevantmarket for such LIBOR Interest Period, or Lenders having a Pro Rata Share of50% or more under a Facility determine (and notify Administrative Agent) thatthe LIBOR rate applicable pursuant to Subsection 1.2(A)(1) for any requestedLIBOR Interest Period with respect to a proposed LIBOR Loan under such Facilitydoes not adequately and fairly reflect the cost to such Lenders of funding suchLoan, Administrative Agent shall forthwith give notice thereof to Borrower andLenders, whereupon and until such affected Lender or Lenders notifiesAdministrative Agent, and Administrative Agent notifies Borrower and the otherLenders that the circumstances giving rise to such situation no longer exist,the obligations of any affected Lender to make its portion of such type ofLIBOR Loan shall be suspended and such affected Lender shall make its Pro RataShare of such type of LIBOR Loans as a Base Rate Loan or such other type ofLoan as permitted by Administrative Agent. Any Lender may, in its solediscretion, waive the benefits and provisions of this Subsection with respectto any proposed LIBOR Interest Period.

 

#### (B)           Ifthe introduction of, or any change in, any Applicable Law or any change in theinterpretation or administration thereof by any Governmental Authority, centralbank or comparable agency charged with the interpretation or administrationthereof, or compliance by any Lender with any request or directive (whether ornot having the force of law) of any such Governmental Authority, central bankor comparable agency, in each case occurring after the Closing Date, shall makeit unlawful or impossible for one or more Lenders to honor its obligationshereunder to make or maintain any LIBOR Loan, such Lender shall promptly givenotice thereof to Administrative Agent, and Administrative Agent shall promptlygive notice thereof to Borrower and all other Lenders. Thereafter, until suchLender or Lenders notifies Administrative Agent, and Administrative Agentnotifies Borrower and the other Lenders that such circumstances no longerexist, (i) the obligations of such Lender or Lenders to make LIBOR Loans andthe right of Borrower to convert any Loan of such Lender or Lenders to a LIBORLoan or continue any Loan of such Lender or Lenders as a LIBOR Loan shall besuspended and (ii) if any Lender may not lawfully continue to maintain a LIBORLoan to the end of the then current LIBOR Interest Period applicable thereto,such Loan shall immediately be converted to the Base Rate Loan.

 

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1.11                           CapitalAdequacy and Other Adjustments.

 

#### (A)                              Ifafter the Closing Date there occurs the introduction, or change in theinterpretation, of any law, rule, or regulation the effect of which wouldincrease the reserve requirement or otherwise increase the cost to any Lenderof making or maintaining a LIBOR Loan, then Administrative Agent, on behalf ofall affected Lenders, shall submit a certificate to Borrower setting forth theamount and demonstrating the calculation of such increased cost. Borrower shallbe obligated to pay the amount of such increased cost to Administrative Agentfor the benefit of the affected Lenders within 15 days after receipt of suchcertificate. Such certificate shall, absent manifest error, be final,conclusive and binding for all purposes. There is no limitation on the numberof times such a certificate may be submitted; provided that anysuch certificate may not seek increased costs for any period prior to thedate that is six months prior to the date of such certificate.

####  

#### (B)                                Inthe event that the adoption after the Closing Date of any law, treaty,governmental (or quasi-governmental) rule, regulation, guideline or orderregarding capital adequacy, reserve requirements or similar requirements orcompliance by any Lender or any corporation controlling such Lender with anyrequest or directive regarding capital adequacy, reserve requirements orsimilar requirements (whether or not having the force of law and whether or notfailure to comply therewith would be unlawful) from any central bank orgovernmental agency or body having jurisdiction does or shall have the effectof increasing the amount of capital, reserves or other funds required to bemaintained by such Lender or any corporation controlling such Lender andthereby reducing the rate of return on such Lender’s or such corporation’scapital as a consequence of its obligations hereunder, then Borrower shall beobligated, from time to time within 15 days after notice and demand from suchLender (together with the certificate referred to in the next sentence and witha copy to Administrative Agent), to pay to Administrative Agent, for theaccount of such Lender, additional amounts sufficient to compensate such Lenderfor such reduction. A certificate as to the amount of such cost and showing thebasis of the computation of such cost submitted by such Lender to Borrower andAdministrative Agent shall, absent manifest error, be final, conclusive andbinding for all purposes. There is no limitation on the number of times such acertificate may be submitted; provided that any such certificate may notseek increased costs for any period prior to the date that is six months priorto the date of such certificate.

####  

1.12                           OptionalPrepayment/Replacement of Lender in Respect of Increased Costs. Within 15days after receipt by Borrower of written notice and demand from any Lender (an“**Affected Lender**”) for payment ofadditional costs as provided in Subsections 1.11, 1.13 or 1.14 or if it becomesillegal or impossible for any Lender to continue to fund or to make LIBOR Loanspursuant to Subsection 1.10(B), as a result of any condition described ineither of such Subsections, then, unless such Lender has theretofore removed orcured the conditions creating the cause for such obligation to pay suchadditional amounts or for such illegality or impossibility, Borrower may, atits option, notify Administrative Agent and such Affected Lender of itsintention to do one of the following:

 

#### (A)                              Borrowermay obtain, at Borrower’s expense, a replacement Lender (“**Replacement Lender**”) for such AffectedLender, which Replacement Lender shall be reasonably satisfactory toAdministrative Agent. In the event Borrower obtains a Replacement Lender within90 days following notice of its intention to do so, the Affected Lender shallsell and assign its Loans and

####  

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#### its obligations under the Loan Commitments to such Replacement Lenderat a price (including accrued interest) that is reasonably acceptable to theAffected Lender and the Replacement Lender, provided that Borrower hasreimbursed such Affected Lender for its increased costs for which it isentitled to reimbursement under this Agreement through the date of such saleand assignment; or

####  

#### (B)                                Borrowermay prepay in full all outstanding Obligations owed to such AffectedLender and terminate such Affected Lender’s Pro Rata Share of the LoanCommitments, in which case the Loan Commitments will be permanently reduced bythe amount of such Pro Rata Share. Borrower shall, within 90 days followingnotice of its intention to do so, prepay in full all outstanding Obligationsowed to such Affected Lender (including all applicable Breakage Fees and suchAffected Lender’s increased costs for which it is entitled to reimbursementunder this Agreement through the date of such prepayment), and terminate suchAffected Lender’s obligations under the Loan Commitments. Any such prepaymentpursuant to this Subsection 1.12(B) shall be applied in accordancewith Subsection 1.8 (except that such prepayment shall be solely for theaccount of the Affected Lender and not for the account of all the Lenders inaccordance with their Pro Rata Shares) and shall be accompanied by payment ofall applicable Breakage Fees and accrued interest on the amount repaid.

####  

1.13                           Taxes.

 

(A)                              NoDeductions. Any and all payments or reimbursements made hereunder or underthe Notes shall be made free and clear of and without deduction for any and alltaxes, levies, imposts, deductions, charges or withholdings, and allliabilities with respect thereto (all such taxes, levies, imposts, deductions,charges or withholdings and all liabilities with respect thereto, excludingsuch taxes imposed on net income, herein “**Tax Liabilities**”),excluding, however, franchise taxes and taxes imposed on the net income of aLender or Administrative Agent by the federal, state, local or foreign taxingauthorities in the jurisdiction in which the principal place of business ofsuch Lender or Administrative Agent is located. If Borrower shall be requiredby law to deduct any such amounts from or in respect of any sum payablehereunder to any Lender or Administrative Agent, then, except as provided inSubsection 1.13(B) and the last sentence of this Subsection 1.13(A),the sum payable hereunder shall be increased as may be necessary so that,after making all required deductions, such Lender or Administrative Agentreceives an amount equal to the sum it would have received had no suchdeductions been made. Notwithstanding the foregoing, any Lender that fails toprovide Borrower and Administrative Agent a properly completed and executed IRSForm W-9 will be subject to backup withholding on payments to such Lenderwithout any gross-up hereunder.

 

(B)                                ForeignLenders. Each Lender which would be considered a foreign lender under theIRC (“**Foreign Lender**”) as to whichpayments made under this Agreement or under the Notes is exempt for withholdingtax under the IRC or is subject to withholding tax at a reduced rate under anapplicable statute or tax treaty shall provide to Borrower and AdministrativeAgent (i) a properly completed and executed United States Internal RevenueService Form W-8ECI or W-8BEN or other applicable form, certificate ordocument prescribed by the Internal Revenue Service of the United Statescertifying as to such Foreign Lender’s entitlement to such exemption or reducedrate of withholding with respect to payments to be made to such Foreign Lenderunder this Agreement and under the Notes (a “**Certificateof Exemption**”) or (ii) letter from any such Foreign Lenderstating that it is not entitled to any such exemption or reduced rate ofwithholding (a “**Letter of Non-Exemption**”).

 

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Prior to becoming aLender under this Agreement and within 15 days after a reasonable writtenrequest of Borrower or Administrative Agent from time to time thereafter, eachForeign Lender that becomes a Lender under this Agreement shall provide aCertificate of Exemption or a Letter of Non-Exemption to Borrower andAdministrative Agent.

 

If a Foreign Lender isentitled to an exemption with respect to payments to be made to such ForeignLender under this Agreement (or to a reduced rate of withholding) and does notprovide a Certificate of Exemption to Borrower and Administrative Agent withinthe time periods set forth in the preceding paragraph, Borrower shall withholdtaxes from payments to such Foreign Lender at the applicable statutory ratesand Borrower shall not be required to pay any additional amounts as a result ofsuch withholding, provided that all such withholding shall cease or bereduced, as appropriate, upon delivery by such Foreign Lender of a Certificateof Exemption to Borrower and Administrative Agent.

 

1.14                           Changesin Tax Laws. In the event that, subsequent to the Closing Date, (i) anychanges in any existing law, regulation, treaty or directive or in theinterpretation or application thereof, (ii) any new law, regulation,treaty or directive enacted or any interpretation or application thereof, or (iii) complianceby Administrative Agent or any Lender with any request or directive (whether ornot having the force of law) from any Governmental Authority:

 

(1)                                  doesor shall subject Administrative Agent or any Lender to any tax of any kindwhatsoever with respect to this Agreement, the other Loan Documents or anyLoans made hereunder, or change the basis of taxation of payments toAdministrative Agent or such Lender of principal, fees, interest or any otheramount payable hereunder (except for net income taxes or franchise taxes,imposed generally by federal, state, local or foreign taxing authorities in thejurisdiction in which the principal place of business of such Lender orAdministrative Agent is located with respect to interest or commitment or otherfees payable hereunder or changes in the rate of tax imposed by suchjurisdictions on the overall net income of Administrative Agent or suchLender); or

 

(2)                                  doesor shall impose on Administrative Agent or any Lender any other condition orincreased cost in connection with the transactions contemplated hereby orparticipations herein;

 

and the resultof any of the foregoing is to increase the cost to Administrative Agent or anysuch Lender of making or continuing any Loan hereunder, or to reduce any amountreceivable hereunder, as the case may be, then, in any such case, Borrowershall be obligated to promptly pay to Administrative Agent or such Lender, uponits demand, any additional amounts necessary to compensate Administrative Agentor such Lender, on an after-tax basis, for such additional cost or reducedamount receivable, as reasonably determined by Administrative Agent or suchLender with respect to this Agreement or the other Loan Documents. IfAdministrative Agent or such Lender becomes entitled to claim any additionalamounts pursuant to this Subsection 1.14, it shall promptly notifyBorrower of the event by reason of which Administrative Agent or such Lenderhas become so entitled. A certificate as to any additional amounts payablepursuant to the foregoing sentence submitted by Administrative Agent or suchLender to Borrower and Administrative Agent shall,

 

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absentmanifest error, be final, conclusive and binding for all purposes. There is nolimitation on the number of times such a certificate may be submitted.

 

1.15                           Termof This Agreement. All of the Obligations shall become due and payable asotherwise set forth herein, but in any event, all of the remaining Obligationsshall become due and payable on October 31, 2010. This Agreement shallremain in effect through and including, and (except with respect to provisionshereof expressly stated herein to survive any such termination) shall terminateimmediately after, the date on which all Obligations shall have beenindefeasibly and irrevocably paid and satisfied in full.

 

1.16                           Letterof Credit Liability. Upon the occurrence and during the continuance of anEvent of Default and at the direction of Administrative Agent, and in the eventany Letters of Credit are outstanding at the time that Borrower terminates theRevolver Loan Commitment, then (a) with respect to each such Letter ofCredit, Borrower shall either (i) deliver to Administrative Agent for thebenefit of all Lenders with a Revolver Loan Commitment a letter of credit inthe same currency that such Letter of Credit is payable, with a term thatextends 60 days beyond the expiration date of such Letter of Credit, issued bya bank satisfactory to Administrative Agent and in an amount equal to 103% ofthe aggregate outstanding Letter of Credit Liability with respect to suchLetter of Credit, which letter of credit shall be drawable by AdministrativeAgent to reimburse payments of drafts drawn under such Letter of Credit and topay any fees and expenses related thereto or (ii) immediately deposit withAdministrative Agent an amount equal to the aggregate outstanding Letter ofCredit Liability to enable Administrative Agent to make payments under theLetters of Credit when required and such amount shall become immediately dueand payable, and (b) Borrower shall prepay the fees payable under Subsection 1.4(F) withrespect to all such Letters of Credit for the full remaining terms of suchLetters of Credit. Upon termination of any such Letter of Credit, the unearnedportion of such prepaid fee attributable to such Letter of Credit shall berefunded to Borrower.

 

# SECTION 2AFFIRMATIVE COVENANTS

#  

Borrower herebycovenants and agrees that so long as this Agreement is in effect and untilpayment in full of all Obligations (other than unasserted indemnity claims),unless Requisite Lenders shall otherwise give their prior written consent,Borrower shall perform and comply, and shall cause each of itsSubsidiaries to perform and comply, with all covenants in this Section 2.

 

2.1                                 ComplianceWith Laws. Borrower will (i) comply with and will cause its respectiveSubsidiaries to comply with the requirements of all Applicable Laws (includinglaws, rules, regulations and orders relating to taxes, employer and employeecontributions, securities, employee retirement and welfare benefits,environmental protection matters and employee health and safety) as now ineffect and which may be imposed in the future in all jurisdictions inwhich Borrower or any Subsidiary of Borrower are now or hereafter doingbusiness, (ii) obtain and maintain and will cause each of itsSubsidiaries, to obtain and maintain all licenses, qualifications and permits(including the Franchises and the Licenses) now held or hereafter required for Borroweror any Subsidiary of

 

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Borrower to operate, and (iii) comply with and will cause itsrespective Subsidiaries to comply with all Material Contracts, other than, inall such cases, as would not, individually or in the aggregate, reasonably beexpected to have a Material Adverse Effect. This Subsection 2.1 shall notpreclude Borrower or any Subsidiary of Borrower from contesting any taxes orother payments, if they are being diligently contested in good faith and ifadequate reserves therefor are maintained in conformity with GAAP.

 

2.2                                 Maintenanceof Books and Records; Properties; Insurance. Borrower will keep and willcause each of its Subsidiaries to keep adequate records and books of account,in which full, true and correct entries will be made in accordance with GAAPconsistently applied, reflecting all financial transactions of such Persons. Borrowerwill maintain or cause to be maintained and will cause each of its Subsidiariesto maintain or cause to be maintained in good repair, working order andcondition all Collateral used in its business and the business of itsSubsidiaries, and will make or cause to be made all appropriate repairs,renewals and replacements thereof, except for (i) dispositions of assetspermitted hereunder or (ii) as would not reasonably, individually or inthe aggregate, reasonably be expected to have a Material Adverse Effect. Borrowerwill and will cause each of its Subsidiaries to maintain complete, accurate andup-to-date books, records, accounts and other information relating to allCollateral in such form and in such detail as may be satisfactory toAdministrative Agent. Borrower will maintain or cause to be maintained and willcause each of its Subsidiaries to maintain or cause to be maintained, withfinancially sound and reputable insurers, insurance with respect to itsbusiness and properties and the business and properties of its Subsidiariesagainst loss and damage of the kinds and of such types, with such insurers, insuch amounts, with such limits and deductibles and otherwise on such terms andconditions as customarily carried or maintained by corporations of establishedreputation engaged in similar businesses, and will deliver evidence thereof toAdministrative Agent on or prior to the Closing Date, and thereafter at least30 days prior to any expiration thereof, evidence of renewal of such insurance.If any part of the Collateral lies within a “special flood hazard area” asdefined and specified by the Federal Emergency Management Agency (or otherappropriate Governmental Authority) pursuant to the Flood Disaster ProtectionAct of 1973, as amended (the “**FDPA**”),and Administrative Agent determines that flood insurance coverage is requiredto be obtained for such Collateral in order for Administrative Agent andLenders to comply with the FDPA, the appropriate Borrower shall obtain andmaintain such flood insurance policies as Administrative Agent reasonablyrequests so that Administrative Agent and Lenders shall be deemed in compliancewith the FDPA and shall deliver evidence thereof to Administrative Agent. Suchpolicies of flood insurance shall be in form and substance reasonablysatisfactory to Administrative Agent and shall be in an amount of at least thelesser of the value of such Collateral constituting buildings, structures orpersonal property located within the “special flood hazard area” or the maximumlimit of coverage available under Applicable Law. Borrower will cause (i) AdministrativeAgent, for the benefit of itself and Lenders, pursuant to endorsements andassignments in form and substance reasonably satisfactory toAdministrative Agent, to be named (A) as a lender loss payee or mortgageein the case of property loss and damage insurance, (B) as assignee in thecase of all business interruption insurance and (C) as an additionalinsured in the case of all flood insurance and workers’ compensation insurance(to the extent permitted by Applicable Law) and (ii) Administrative Agent,pursuant to endorsements in form and substance reasonably acceptable toAdministrative Agent, to be named as an additional insured in the case of allliability insurance. All insurance policies required hereunder shall (i) includeeffective waivers by the insurer

 

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of subrogation againstAdministrative Agent, Lenders and their respective affiliates and any right ofinsurer to any setoff or counterclaim or any other deduction, whether byattachment or otherwise, in respect of any liability of Borrower (or itsSubsidiaries), (ii) following notice to Borrower during the continuationof a Default or Event of Default, provide that all insurance proceeds shall beadjusted with and paid to Administrative Agent, (iii) be non-cancelable andnot subject to material change as to Administrative Agent except upon 30 daysprior written notice given by the insurer to Administrative Agent, (iv) containa breach of representation or warranty provision in favor of AdministrativeAgent, (v) contain a cross liability clause, (vi) with respect toproperty loss and damage insurance and business interruption insurance, providethat the interests of the Administrative Agent shall not be invalidated by anyaction or inaction (other than non-payment) of Borrower, its Subsidiaries, orany other Person, and shall insure the Administrative Agent regardless of anybreach or violation by Borrower, its Subsidiaries or any other person, of anywarranties, declarations or conditions of such policies and (vii) providethat the insurance be primary and without right of contribution from any otherinsurance which may be available to Administrative Agent and expresslyprovide that all provisions thereof, except the limits of liability (whichshall be applicable to all insureds as a group), shall operate in the samemanner as if there were a separate policy covering each insured, and liabilityfor premiums shall be solely a liability of Borrower.

 

Administrative Agent shall be entitled, uponreasonable advance notice, to review and/or receive copies of, the insurancepolicies of Borrower and its Subsidiaries carried and maintained with respectto Borrower’s obligations under this Subsection 2.2. Notwithstandinganything to the contrary herein, no provision of this Subsection 2.2 orany provision of this Agreement shall impose on Administrative Agent andLenders any duty or obligation to verify the existence or adequacy of theinsurance coverage maintained by Borrower and its Subsidiaries, nor shallAdministrative Agent and Lenders be responsible for any representations orwarranties made by or on behalf of Borrower and its Subsidiaries to anyinsurance broker, company or underwriter. Administrative Agent, at its soleoption, may obtain such insurance if not provided by Borrower and in suchevent, Borrower shall reimburse Administrative Agent upon demand for the costthereof.

 

2.3                                 Inspection;Lender Meeting. Borrower will permit and will cause each of itsSubsidiaries to permit, at the expense of Borrower, any authorized representativesof any Lender (i) to visit and inspect any of its properties and theproperties of its Subsidiaries, including their financial and accountingrecords, and to make copies and take extracts therefrom, and (ii) todiscuss its and their affairs, finances and business with its and theirofficers, employees and certified public accountants, in both cases uponreasonable prior notice at such reasonable times during normal business hoursand as often as may be reasonably requested; provided, that, exceptduring the continuance of a Default, each visit or inspection by a Lender inexcess of one visit or inspection  duringa calendar year shall be at the expense of such Lender. Without in any waylimiting the foregoing, Borrower will participate in and will cause its keymanagement personnel to participate in a meeting with Administrative Agent andLenders at least once during each year, which meeting shall be held at suchtime and such place as may be reasonably requested by AdministrativeAgent.

 

2.4                                 LegalExistence, Etc. Except as otherwise permitted by Subsection 3.6,Borrower will, and will cause each of its Subsidiaries to, at all timespreserve and keep in full force and effect its legal existence and goodstanding and all rights and franchises (including the Franchises and the

 

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Licenses), except aspermitted hereunder as and as would not reasonably be expected to have aMaterial Adverse Effect.

 

2.5                                 Useof Proceeds. Borrower will use the proceeds of the Loans, and will causeany of its Subsidiaries who receive (directly or indirectly) proceeds of theLoans to use such proceeds, solely for the purposes described in the recitalparagraphs to this Agreement. No part of any Loan will be used (directlyor indirectly) to purchase any “margin stock” as defined in, or otherwise inviolation of, the regulations of the Federal Reserve System.

 

2.6                                 FurtherAssurances; Notices of Acquisition of Real Property. Borrower will, andwill cause each of its Subsidiaries to, from time to time, do, execute anddeliver all such additional and further acts, documents and instruments asAdministrative Agent or any Lender reasonably requests to consummate thetransactions contemplated hereby and to vest completely in and assure AdministrativeAgent and Lenders of their respective rights under this Agreement and the otherLoan Documents, including such financing statements, documents, securityagreements and reports to evidence, perfect or otherwise implement the securityfor repayment of the Obligations contemplated by the Loan Documents. Borrowerwill notify Administrative Agent in each Compliance Certificate deliveredpursuant to Subsection 4.5(C) of the acquisition (including by way oflease) by Borrower (or its Subsidiaries) of any real property or any interesttherein including all easements and licenses (and the cost thereof or annualrentals with respect thereto), and of any registered intellectual property, orthe opening of any new deposit, investment or other accounts, and will executeand deliver all such additional documents and instruments as AdministrativeAgent may reasonably  require,promptly upon the request of Administrative Agent (including, upon writtenrequest of Administrative Agent, mortgages, title insurance policies, landlordand mortgagee waivers and consents, UCC financing statements (including fixturefilings), environmental audits, completed environmental questionnaires,surveys, assignments, control agreements and legal opinions).

 

2.7                                 CoBankPatronage Capital. So long as CoBank is a Lender hereunder, Borrower willacquire non-voting participation certificates in CoBank in such amounts and atsuch times as CoBank may require in accordance with CoBank’s Bylaws andCapital Plan (as each may be amended from time to time), except that themaximum amount of participation certificates that Borrower may be requiredto purchase in CoBank in connection with the Loans may not exceed themaximum amount permitted by the Bylaws at the time this Agreement is entered into.The rights and obligations of the parties with respect to such participationcertificates and any distributions made on account thereof or on account ofBorrower’s patronage with CoBank shall be governed by CoBank’s Bylaws. CoBankagrees that all Loans that are made by CoBank and that are retained for its ownaccount and not sold in a participation shall be entitled to patronagedistributions in accordance with the CoBank’s Bylaws; all Loans that are madeby CoBank and are included in a sale of a participation shall not be entitledto patronage distributions. CoBank’s Pro Rata Share of the Loans and otherObligations due to CoBank shall be secured by a statutory first lien on allequity which Borrower may now own or hereafter acquire in CoBank. Suchequity shall not, however, constitute security for the Obligations dueto any other Lender. CoBank shall not be obligated to set off or otherwiseapply such equities to Borrower’s obligations to CoBank.

 

2.8                                 CollateralAssignments of Material Contracts. Borrower and its Subsidiaries, asappropriate, shall promptly execute and deliver to Administrative Agent, forthe benefit of

 

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Administrative Agent andall Lenders, all such Collateral Contract Assignments with respect to MaterialContracts as Administrative Agent may request from time to time, suchCollateral Contract Assignments to contain, to the extent obtainable throughthe use of reasonably commercial efforts, a consent to the collateralassignment of the applicable Material Contract satisfactory to AdministrativeAgent and containing such other reasonable terms and conditions in light of thenature of the applicable Material Contract and the parties thereto other thanBorrower and its Subsidiaries.

 

2.9                                 InvestmentCompany Act. Neither Borrower nor any of its Subsidiaries shall be requiredto register under, or is otherwise subject to regulation as an “investmentcompany” as that term is defined in, the Investment Company Act of 1940, asamended.

 

2.10                           Paymentof Obligations. Unless contested in good faith by appropriate proceedingsand then only to the extent reserves required by GAAP have been set asidetherefore, Borrower will, and will cause each of its Subsidiaries to, (i) pay,discharge or otherwise satisfy at or before maturity all liabilities andobligations as and when due (subject to any applicable subordinationprovisions), and any additional costs that are imposed as a result of anyfailure to so pay, discharge or otherwise satisfy such obligations, except tothe extent failure to do so would not be reasonably likely to have a MaterialAdverse Effect, and (ii) pay and discharge all taxes, assessments, claimsand governmental charges or levies imposed upon it, upon its income or profitsor upon any of its properties, prior to the date on which penalties wouldattach thereto or a lien would attach to any of the properties of Borrower ifunpaid unless the same are being contested in good faith and by appropriateproceedings and then only if and to the extent reserves required by GAAP havebeen set aside therefor.

 

2.11                           EnvironmentalLaws. Borrower will, and will at all times cause each of its Subsidiariesto:

 

#### (A)                              Complyin all material respects with, and ensure compliance in all material respectsby all tenants and subtenants, if any, with, all applicable Environmental Lawsand obtain and comply in all material respects with and maintain, and ensurethat all tenants and subtenants obtain and comply in all material respects withand maintain, any and all licenses, approvals, notifications, registrations orpermits required by applicable Environmental Laws except to the extent thatfailure to do so could not reasonably be expected to have a Material AdverseEffect;

####  

#### (B)                                Conductand complete all investigations, studies, sampling and testing, and allremedial, removal and other actions required under Environmental Laws andpromptly comply in all material respects with all lawful orders and directivesof all Governmental Authorities regarding Environmental Laws except to theextent that the same are being contested in good faith by appropriateproceedings and the pendency of such proceedings could not reasonably beexpected to have a Material Adverse Effect; and

####  

#### (C)                                Defend,indemnify and hold harmless Administrative Agent and Lenders, and theirrespective employees, Administrative Agent, officers and directors, from andagainst any and all claims, demands, penalties, fines, liabilities,settlements, damages, costs and expenses of whatever kind or nature known orunknown, contingent or otherwise, arising out of, or in any way relating to theviolation of, noncompliance with or liability under, any Environmental Lawapplicable

 

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#### to the operations of Borrower or any of its Subsidiaries or theirrespective properties, or any orders, requirements or demands of GovernmentalAuthorities related thereto, including, without limitation, reasonable attorney’sand consultant’s fees, investigation and laboratory fees, response costs, courtcosts and litigation expenses, except to the extent that any of the foregoingis determined by a final and nonappealable judgment of a court of competentjurisdiction to have resulted from the negligence or willful misconduct of theparty seeking indemnification therefor. The agreements in this Subsection 2.12 shall surviverepayment of the Obligations and the termination of this Agreement.

####  

2.12                           Creationor Acquisition of Subsidiaries. Subject to the provisions of Subsection 3.6,Borrower may from time to time create new Subsidiaries, and Subsidiariesof Borrower may create or acquire new Subsidiaries, provided thatconcurrently with (and in any event within ten Business Days thereafter) thecreation or acquisition of any new Subsidiary, all the capital stock of orother equity interest in such new Subsidiary owned by the Borrower or anySubsidiary of the Borrower will be pledged to the Administrative Agent asfollows (provided that any equity interests in any new foreignSubsidiary formed or acquired after the Closing Date that constitutes a “controlledforeign corporation” under Section 956 of the IRC which, when aggregatedwith all of the other shares of equity interests in such Subsidiary pledged toAdministrative Agent, would result in more than 65% of the total equityinterests of such Subsidiary being pledged to Administrative Agent, need not bepledged):  (i) if Borrower directlyowns any of the capital stock of or other equity interest in such newSubsidiary, Borrower will execute and deliver to the Administrative Agent anyamendment or supplement to its Security Agreement as Administrative Agent may reasonablyrequest pursuant to which all such capital stock or other equity interest shallbe pledged to the Administrative Agent, together, if applicable, with thecertificates evidencing such capital stock and undated stock powers dulyexecuted in blank; and (ii) if any of the capital stock of or other equityinterest in such new Subsidiary is owned by a wholly-owned direct or indirectSubsidiary of Borrower, such other Subsidiary will execute and deliver to theAdministrative Agent (except in connection with a Permitted Acquisition wherethe stock is pledged to another Person in connection with such acquisition orany debt assumed thereunder) a Security Agreement or an amendment or supplementto its Security Agreement, pursuant to which all of the capital stock of orother equity interest in such new Subsidiary owned by such other Subsidiaryshall be pledged to the Administrative Agent, together with the certificatesevidencing such capital stock and undated stock powers duly executed in blank. Aspromptly as reasonably possible, Borrower and its Subsidiaries will deliver anysuch other documents, certificates and opinions (including opinions of localcounsel in the jurisdiction of organization of each such new Subsidiary), in form andsubstance reasonably satisfactory to the Administrative Agent, as theAdministrative Agent may reasonably request in connection therewith andwill take such other action as the Administrative Agent may reasonablyrequest to create in favor of the Administrative Agent a perfected securityinterest on a first-priority basis in the Collateral being pledged pursuant tothe documents described above.

####  

# SECTION 3NEGATIVE COVENANTS

#  

Borrower herebycovenants and agrees that so long as this Agreement is in effect and untilpayment in full of all Obligations (other than unasserted indemnity claims),unless Requisite Lenders

 

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shall otherwise givetheir prior written consent, Borrower shall perform and comply, and shallcause each of its Subsidiaries to perform and comply, with all covenantsin this Section 3.

 

3.1                                 Indebtedness.Borrower will not, and will not permit any of its Subsidiaries to, directly orindirectly, create, incur, assume, guaranty or otherwise become or remainliable with respect to any Indebtedness other than:

 

#### (A)                              theObligations;

####  

#### (B)                                theContingent Obligations permitted by Subsection 3.4;

####  

#### (C)                                Indebtednessunder purchase money security agreements and Capital Leases, the aggregateprincipal amount of which shall not exceed $5,000,000 at any one time;

####  

#### (D)                               Indebtednessto US Bancorp Equipment Finance, Inc. in a principal amount not to exceed$1,900,000, existing on the Closing Date (the “**Airplane Indebtedness**”);

####  

#### (E)                                 Indebtednessincurred in connection with any Related Interest Rate Agreement and incurred inconnection with any Interest Rate Agreement to hedge the interest rate exposureapplicable to any portions of other Indebtedness permitted pursuant to this Subsection 3.1;

####  

#### (F)                                 Indebtednessassumed in connection with Permitted Acquisitions; and

####  

#### (G)                                otherIndebtedness, the aggregate principal amount of which shall not exceed$2,000,000 at any one time.

####  

3.2                                 Liensand Related Matters. Borrower will not, and will not permit any of itsSubsidiaries to, directly or indirectly, create, incur, assume or permit toexist any Lien on or with respect to any property or asset (including anydocument or instrument with respect to goods or accounts receivable) ofBorrower or any of its Subsidiaries, whether now owned or hereafter acquired,or any income or profits therefrom, except Permitted Encumbrances.

 

3.3                                 Investments.Borrower will not, and will not permit any of its Subsidiaries to, directly orindirectly, make or own any Investment in any Person except:

 

#### (A)                              Borrowerand its Subsidiaries may make and own Investments in Cash Equivalents, providedthat such Cash Equivalents are not subject to set off rights;

####  

#### (B)                                obligationsof or equities in CoBank, as set forth in Subsection 2.8;

####  

#### (C)                                existingInvestments set forth on Schedule 3.3(c);

####  

#### (D)                               theAcquisition and Permitted Acquisitions;

####  

#### (E)                                 exerciseof the Put-Call;

####  

#### (F)                                 purchasesafter the Closing Date of additional ownership interests in BDC, in anaggregate amount during each fiscal year of Borrower not to exceed $250,000;

 

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#### (G)                                inaddition to Subsection 3.3(F), within one year of the Amendment Date,purchases of additional ownership interests in BDC, and Investments in BDC madeto allow BDC to redeem such interests, provided, that  (i) the aggregate amount of theInvestments made in reliance on this Subsection (G) may notexceed $20,000,000 and (ii), subject to the last sentence of Section 2.3of the Security Agreement, all of the ownership interests of the Borrower inBDC are pledged to the Administrative Agent and the Borrower has delivered tothe Administrative Agent the stock certificates evidencing such ownershipinterest and all other documents required by Section 2.3(i) or Article Vof the Security Agreement;

####  

#### (H)                               advancesto Subsidiaries, provided that such advances are evidenced by writtenpromissory notes, such notes are demand notes and contain terms and provisions,including applicable interest rates, reasonable acceptable to AdministrativeAgent,  and such notes have beendelivered to Administrative Agent; and

####  

#### (I)                                    otherInvestments in the Communications industry, the aggregate amount of which shallnot exceed for any fiscal year (X) 5% of Borrower’s consolidated assets for theprior fiscal year plus (Y) the excess, if any, of the amount thatBorrower was permitted in the prior fiscal year to dividend or distributepursuant to clause (i) of the first proviso in Subsection 3.5 overthe aggregate amount of dividends and distributions actually made by Borrowerduring such fiscal year pursuant to clause (i) of the first proviso in Subsection 3.5,minus (Z) the aggregate amount of assets or business acquired in relianceon the proviso of Subsection 3.6(iv) for the fiscal year of theInvestment.

####  

3.4                                 ContingentObligations. Borrower will not, and will not permit any of its Subsidiariesto, directly or indirectly, create or become or be liable with respect to anyContingent Obligation except those:

 

#### (A)                              resultingfrom endorsement of negotiable instruments for collection in the ordinarycourse of business;

####  

#### (B)                                arisingunder indemnity agreements to title insurers in connection with mortgagee titleinsurance policies in favor of Collateral Agent for the benefit of itself andthe other Lenders;

####  

#### (C)                                arisingwith respect to customary indemnification obligations incurred in connectionwith Permitted Acquisitions and permitted Asset Dispositions (providedthat such obligations shall in no event exceed the amount of proceeds receivedin connection therewith);

####  

#### (D)                               arisingin the ordinary course of business with respect to customary indemnificationobligations incurred in connection with liability insurance coverage;

 

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#### (E)                                 incurredin the ordinary course of business with respect to surety and appeal bonds,performance and return-of-money bonds and other similar obligations notexceeding at any time outstanding $500,000 in aggregate liability;

####  

#### (F)                                 incurredas a guaranty of Indebtedness permitted by Subsection 3.1 (providedthat such guaranty obligation shall in no event exceed the amount of suchIndebtedness plus other related costs and expenses of collection as set forthin such guaranty); and

####  

#### (G)                                ContingentObligations arising under the Loan Documents.

####  

3.5                                 RestrictedJunior Payments. Borrower will not, directly or indirectly, declare, order,pay, make or set apart any sum for any Restricted Junior Payment; provided,however, that so long as no Default or Event of Default exists before orwill result after giving effect to such distribution on a pro forma basis,Borrower may, during any fiscal year commencing with the fiscal year ending December 31,2005, (i) make, declare or pay lawful cash dividends or distributions toits shareholders or redeem capital stock in an aggregate amount which isgreater of 50% of (y) Borrower’s consolidated net income (excluding non-cashextraordinary items, such as the writedown or writeup of assets) for theimmediately preceding fiscal year or (z) Borrower’s consolidated netincome for the current year annualized and (ii) redeem or repurchasecapital stock of Borrower in connection with the termination of an employee orany other Board approved stock redemption or repurchase plan in an aggregateamount during each fiscal year not to exceed $250,000; provided, however,further, that notwithstanding any other provisions of this Subsection 3.5,Borrower shall be permitted to (y) exercise the “call” and perform the “put”provisions relating to the 5% minority interest of BAS (as defined in theCommnet Operating Agreement) in Commnet provided for in the Commnet OperatingAgreement in effect  as of the ClosingDate (the “**Put-Call**”), and (z)make the tax distributions provided for in the Commnet Operating Agreement ineffect as of the Closing Date.

 

3.6                                 Restrictionon Fundamental Changes. Borrower will not, and will not permit any of itsSubsidiaries to, directly or indirectly: (i) unless and only to the extent required by law or as would notbe reasonably expected to be adverse to the interests of Lenders, amend, modifyor waive any term or provision of its articles of organization, operatingagreement, management agreements, articles of incorporation, certificates ofdesignations pertaining to preferred stock or by-laws; (ii) enter into anytransaction of merger or consolidation, except that any Subsidiary ofBorrower may be merged with or into Borrower or any wholly ownedSubsidiary (provided that Borrower or such wholly owned Subsidiary isthe surviving entity) and except that any Permitted Acquisition or anypermitted Asset Disposition may be structured as merger; (iii) liquidate,wind-up or dissolve itself (or suffer any liquidation or dissolution), exceptin connection with another transaction permitted under clause (ii) above;or (iv) acquire by purchase or otherwise all or any substantial part ofthe business or assets of any other Person (whether by stock purchase orotherwise), provided, that Borrower or any Subsidiary of Borrower may acquireall or any substantial part of the business or assets of any other Personor equity interests in any Person so long as (a) no Default or Event ofDefault exists before or will result after giving effect to such acquisition ona pro forma basis, (b) such assets or business are held in Borrower, anexisting Subsidiary or a new Subsidiary that complies with Subsection 2.12,and (c) the aggregate amount of assets or business acquired pursuant tothis proviso in any fiscal year of Borrower (without deduction for Indebtednessassumed) does not exceed the sum of  (X)5% of Borrower’s consolidated assets for the prior fiscal year plus (Y)the

 

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excess, if any, of theamount that Borrower was permitted in the prior fiscal year to dividend ordistribute pursuant to clause (i) of the first proviso in Subsection 3.5over the aggregate amount of dividends and distributions actually made byBorrower during such fiscal year pursuant to clause (i) of the firstproviso in Subsection 3.5, minus (Z) the aggregate amount ofInvestments made pursuant to Section 3.3(I) for the fiscal year of theacquisition (each, a “**Permitted Acquisition**”).

 

3.7                                 Disposalof Assets or Subsidiary Stock. Borrower will not, and will not permit anyof its Subsidiaries to, directly or indirectly, convey, sell (including,without limitation, pursuant to a sale and leaseback transaction, except thosethat would be permitted under Subsection 3.1(G) deeming any suchsale-leaseback to be Indebtedness, subject to documentation reasonablysatisfactory to Administrative Agent), lease (including, without limitation,pursuant to a lease and leaseback transaction), sublease, transfer or otherwisedispose of, or grant any Person an option to acquire, in one transaction or a series oftransactions, any of its property, business or assets, or the capital stock ofor other equity interests in any of its Subsidiaries, whether now owned orhereafter acquired, except for (i) bona fide sales or leases of inventoryto customers in the ordinary course of business, dispositions of surplus, wornout or obsolete equipment, and any conveyance, lease, sublease, transfer orother disposition of assets of any of Borrower or its Subsidiaries to Borroweror any of its wholly owned Subsidiaries; (ii) fair market value sales ofCash Equivalents; (iii) leasing or subleasing of its property in theordinary course of business; (iv) the sale of all or substantially all ofthe assets of Comnet Illinois, LLC and MoCelCo, LLC to AT&T Mobility, LLCon terms (a) substantially the same as those set forth in the term sheet,dated as of May 1, 2007, between Comnet Wireless, LLC and AT&TMobility, LLC, or (b) reasonably satisfactory to the Administrative Agent;and (v) all other Asset Dispositions if all of the following conditionsare met: (a) the aggregate market value of such assets sold in any fiscalyear of Borrower does not exceed $5,000,000 in the aggregate for Borrower andits Subsidiaries; (b) the consideration received by Borrower or suchSubsidiary is at least equal to the fair market value of such assets; (c) thesole consideration received is cash or other equipment of comparable value tothat disposed of and that is to be used in the business of Borrower or suchSubsidiary; (d) after giving effect to the Asset Disposition, Borrower, ona combined and consolidated basis with its Subsidiaries as set forth in Section 4,are in compliance on a pro forma basis with the covenants set forth in Section 4recomputed for the most recently ended fiscal quarter for which information isavailable; and (e) no Default or Event of Default then exists or shallresult from the Asset Disposition.

 

3.8                                 Transactionswith Affiliates. Borrower will not, and will not permit any of itsSubsidiaries to, directly or indirectly, enter into or permit to exist anytransaction (including the purchase, sale, lease or exchange of any property orthe rendering of any service) with any Affiliate or with any director, officeror employee of Borrower or any Affiliate, except (i) as set forth on Schedule 3.8or as permitted pursuant to Subsections 3.3, 3.5, 3.6, 3.7 and 3.9; (ii) transactionsupon fair and reasonable terms which (in the case of transactions requiringpayments by Borrower or its Subsidiaries in the aggregate in excess of $250,000in any fiscal year) are fully disclosed to Lenders and are no less favorable toBorrower or such Subsidiary than would be obtained in a comparable arm’s lengthtransaction with a Person that is not an Affiliate; (iii) transactionsamong Borrower and its wholly owned Subsidiaries; or (iv) payment ofcompensation to directors, officers and employees in the ordinary course ofbusiness for services actually rendered in their capacities as directors, officersand employees, provided such compensation is reasonable and comparablewith compensation paid by companies of like nature and similarly situated.

 

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3.9                                 ManagementFees. Borrower will not, and will not permit any of its Subsidiaries to,directly or indirectly, pay any management or other similar fees to any Person;except management fees paid to Borrower or, by any Subsidiary of Commnet, toCommnet, Borrower or any wholly owned Subsidiary of Borrower, or othermanagement or similar fees proposed by Borrower and satisfactory to RequisiteLenders.

 

3.10                           Conductof Business. Borrower will not, and will not permit any of its Subsidiariesto, directly or indirectly, engage in any business other than businesses ofowning, constructing, managing, operating and investing (subject to Subsection 3.3)in Communications Systems or other businesses related thereto.

 

3.11                           FiscalYear. Borrower will not, and will not permit any of its Subsidiaries to,change its fiscal year, which ends on December 31.

 

3.12                           Modificationof Agreements. Borrower will not amend, modify or change, or consent oragree to any amendment, modification or change to, any of the terms of anyMaterial Contracts, except to the extent such change, amendment, modificationor consent is not materially adverse to Administrative Agent or any Lender andwould not otherwise have a Material Adverse Effect.

 

3.13                           InconsistentAgreements. Borrower will not, and willnot permit any of its Subsidiaries to, enter into any agreement containing anyprovision which would (a) be violated or breached by any borrowing byBorrower hereunder or by the performance by Borrower or such Subsidiary of anyof its obligations hereunder or under any other Loan Document (other thanpermitted Capital Leases and purchase money security agreements), (b) prohibitBorrower or such Subsidiary from granting to Administrative Agent, for thebenefit of itself and Lenders a lien on any of its assets (other than assetssubject to a purchase money security interest or a Capital Lease) or (c) createor permit to exist or become effective any encumbrance or restriction on theability of such Subsidiary to (i) pay dividends or make otherdistributions to its parent or any other applicable Subsidiary of its parent,or pay any Indebtedness owed to its parent or any Subsidiary of its parent, (ii) makeloans or advances to its parent or (iii) transfer any of its assets orproperties to its parent.

 

# SECTION 4FINANCIAL COVENANTS AND REPORTING

#  

Borrower hereby covenants and agrees that so long asthis Agreement is in effect and until payment in full of all Obligations (otherthan unasserted indemnity claims), unless Requisite Lenders shall otherwisegive their prior written consent, Borrower shall perform and comply with,and shall cause each of its Subsidiaries to perform and comply with, allcovenants in this Section 4. For the purposes of this Section 4,except as expressly provided below, all covenants calculated for Borrower shallbe calculated on a consolidated basis for Borrower and its Subsidiaries.

 

4.1                                 TotalLeverage Ratio. Commencing on the Closing Date, Borrower shall maintain atall times, measured at each fiscal quarter end, a Total Leverage Ratio of lessthan or equal to 2.0:1:0 ; provided, however, Borrower will have60 days after the applicable reporting date to cure any default

 

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under this Subsection 4.1by reducing the Indebtedness of Borrower on a consolidated basis through anequity issuance.

 

4.2                                 CommnetLeverage Ratio. Commencing on the Closing Date, Commnet shall maintain atall times, measured at each fiscal quarter end occurring during the periods setforth below and maintained through the next measurement date, a CommnetLeverage Ratio of less than or equal to the ratio set forth below opposite suchperiod:

 
| **Date**                                                        | ** ** | **Ratio**  | ** ** |
|-----------------------------------------------------------------|------------|------------|------------|
| ** **                                                      | ** ** | ** ** | ** ** |
| Closing  Date through and including December 31, 2005      |       | 7.500:1.0  |       |
|                                                            |       |       |       |
| January 1,  2006 through and including June 30, 2006  |       | 7.000:1.0  |       |
|                                                            |       |       |       |
| July 1,  2006 through and including December 31, 2006 |       | 6.250:1.0  |       |
|                                                            |       |       |       |
| January 1,  2007 through and including June 30, 2007  |       | 5.750:1.0  |       |
|                                                            |       |       |       |
| July 1,  2007 through and thereafter                       |       | 5.000:1.0  |       |

 

; provided, however, Borrower will have 60 days after theapplicable reporting date to cure any default under this Subsection 4.2 byreducing the Indebtedness of Borrower on a consolidated basis or increasing theBorrower Pledged Cash, except that, Borrower and any of its Subsidiaries,including Commnet, may not incur an additional Indebtedness in order tocure such default.

 

4.3                                 DebtService Coverage Ratio. Commencing on the Closing Date, Borrower shallmaintain at all times, measured at each fiscal quarter end, a Debt ServiceCoverage Ratio greater than or equal to 3.0:1.0.

 

4.4                                 Equityto Assets Ratio. Commencing on the Closing Date, Borrower shall maintain atall times, measured at each fiscal quarter end, an Equity to Assets Ratiogreater than or equal to 0.40:1.0.

 

4.5                                 FinancialStatements and Other Reports. Borrower will maintain, and cause each of itsSubsidiaries to maintain, a system of accounting established and administeredin accordance with sound business practices to permit preparation of financialstatements in conformity with GAAP consistently applied (it being understoodthat quarterly financial statements are not required to have footnotedisclosures or reflect year end adjustments). Borrower will deliver or cause tobe delivered each of the financial statements and other reports described belowto Administrative Agent (and each Lender in the case of the financialstatements and other reports described in Subsections 4.5(A) through(I) and (K)).

 

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(A)                              QuarterlyFinancials; Other Quarterly Reports. As soon as available and in any eventwithin 60 days after the end of each of its first three fiscal quarters,Borrower will deliver or cause to be delivered consolidated and consolidatingbalance sheets of Borrower and its Subsidiaries, as at the end of such fiscalquarter, and the related consolidated and consolidating statements of income,stockholders’ equity and cash flows for such fiscal quarter and for the periodfrom the beginning of the then current fiscal year of Borrower to the end ofsuch quarter.

 

(B)                                Year-EndFinancials. As soon as available and in any event within 120 days after theend of each fiscal year of Borrower, Borrower will deliver or cause to bedelivered (i) consolidated and consolidating balance sheets of Borrowerand its Subsidiaries, as at the end of such year, and the related consolidatedand consolidating statements of income, stockholders’ equity and cash flows forsuch fiscal year, and (ii) reports with respect to the financialstatements received pursuant to this Subsection from PriceWaterhouseCoopersor another nationally recognized firm of independent certified publicaccountants selected by Borrower and reasonably acceptable to AdministrativeAgent, which report shall be prepared in accordance with Statement of AuditingStandards No. 58 (the “**Statement**”),as amended, entitled “Reports on Audited Financial Statements” and such reportshall be “Unqualified” (as such term is defined in the Statement).

 

(C)                                ComplianceCertificates. Together with each delivery of financial statements ofBorrower and its Subsidiaries pursuant to Subsections 4.5(A) and (B),Borrower will deliver or cause to be delivered a fully and properly completedcompliance certificate in substantially the same form as Exhibit 4.5(C) (each,a “**Compliance Certificate**”) signedby two of the chief executive officer, the chief financial officer and thechief accounting officer of Borrower.

 

(D)                               Accountants’Reliance Letter. Together with each delivery of financial statements ofBorrower and its Subsidiaries pursuant to Subsection 4.5(B), Borrower willdeliver or cause to be delivered a copy of letters addressed to Borrower’scertified public identifying Lenders as parties that Borrower intend to rely onsuch professional services provided to Borrower by such accountants.

 

(E)                                 Accountants’Reports. Promptly upon receipt thereof, Borrower will deliver or cause tobe delivered copies of all significant reports submitted by Borrower’s firm ofcertified public accountants in connection with each annual, interim or specialaudit or review of any type of the financial statements or related internalcontrol systems of Borrower made by such accountants, including any commentletter submitted by such accountants to management in connection with theirservices.

 

(F)                                 ManagementReport. Together with each delivery of financial statements of Borrower andits Subsidiaries pursuant to Subsections 4.5(A) and 4.5(B), Borrower willdeliver or cause to be delivered (i) if the Borrower is no longer subjectto reporting requirements of the Exchange Act, reports in scope and contentsubstantively similar to its present SEC reporting and (ii) quarterlyoperational data in scope and content substantially similar to that data nowprovided to Borrower’s Board of Directors as its monthly “Dashboard.”** **Theinformation above shall be presented in reasonable detail and shall becertified by the chief financial officer or chief operating officer ofBorrower, respectively, to the effect that, to his or her knowledge afterreasonable

 

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diligence, suchinformation fairly presents the results of operations and financial conditionof Borrower and its Subsidiaries as at the dates and for the periods indicated.

 

(G)                                Budget.(i)  As soon as reasonably available, but in any event within 60 daysafter the first day of each fiscal year of Borrower, respectively, occurringduring the term hereof, Borrower shall deliver or cause to be deliveredoperating and capital spending budgets (the “**Budgets**”)of Borrower and its Subsidiaries for such fiscal year, quarter by quarter and (ii) promptlyafter becoming aware thereof, Borrower will deliver or cause to be deliveredany material amendment to or deviation from such Budgets.

 

(H)                               SECFilings and Press Releases. Promptly upon their becoming available,Borrower will deliver or cause to be delivered copies of (i) all financialstatements, reports, notices and proxy statements sent or made available byBorrower or any Subsidiary of Borrower to its or their respective securityholders, (ii) all regular and periodic reports and all registrationstatements and prospectuses, if any, filed by Borrower or any Subsidiary ofBorrower with any securities exchange or with the Securities and ExchangeCommission (the “**SEC**”) or anygovernmental or private regulatory authority, and (iii) all press releasesand other statements made available by Borrower or any Subsidiary of Borrowerto the public concerning developments in the business of any such Person.

 

(I)                                    Eventsof Default, Etc. Promptly upon any executive officer of Borrower obtainingknowledge of any of the following events or conditions, Borrower shall delivercopies of all notices given or received by Borrower or any Subsidiary ofBorrower with respect to any such event or condition and a certificate of thechief executive officer or chief operating officer of Borrower or suchSubsidiary specifying the nature and period of existence of such event orcondition and what action, if any, Borrower or such Subsidiary has taken, is taking and proposes to takewith respect thereto:  (i) any Eventof Default or Default; (ii) any notice that any Person has given toBorrower or any Subsidiary of Borrower or any other action taken with respectto a claimed default or event or condition of the type referred to in Subsection 6.1(B);or (iii) any event or condition that could reasonably be expected to havea Material Adverse Effect.

 

(J)                                   Litigation.Promptly upon any executive officer of Borrower obtaining knowledge of (i) theinstitution of any action, suit, proceeding, governmental investigation orarbitration against or affecting Borrower or any Subsidiary of Borrower notpreviously disclosed by Borrower to Administrative Agent or (ii) anymaterial development in any action, suit, proceeding, governmentalinvestigation or arbitration at any time pending against or affecting Borroweror any Subsidiary of Borrower which, in each case, could reasonably be expectedto have a Material Adverse Effect, Borrower will promptly give notice thereofto Administrative Agent and provide such other information as may berequested by Administrative Agent and reasonably available to Borrower toenable Administrative Agent and its counsel to evaluate such matter.

 

(K)                               Regulatoryand Other Notices. Within 30 days after filing, receipt or becoming awarethereof, Borrower will deliver or cause to be delivered copies of any filingsor communications sent to or notices and other communications received byBorrower or any Subsidiary of Borrower from any Governmental Authority,including the FCC, any applicable PUC and the SEC, relating to anynoncompliance by Borrower or any Subsidiary of Borrower with any

 

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law or with respect toany matter or proceeding the effect of which could reasonably be expected tohave a Material Adverse Effect.

 

(L)                                 MaterialAdverse Effect. Promptly after becoming aware thereof, Borrower will givewritten notice to Administrative Agent and Lenders of any change in events orchanges in facts or circumstances affecting Borrower or any Subsidiary ofBorrower which individually or in the aggregate have had or could reasonably beexpected to have a Material Adverse Effect.

 

(M)                            EnvironmentalNotices. Promptly after becoming aware of any violation by Borrower or anySubsidiary of Borrower of Environmental Laws or promptly upon receipt of anynotice that a Governmental Authority has asserted that Borrower or anySubsidiary of Borrower is not in compliance with Environmental Laws or that itscompliance is being investigated, Borrower will give notice to AdministrativeAgent and Lenders thereof and provide such other information as may bereasonably available to Borrower to enable Administrative Agent and Lenders toreasonably evaluate such matter.

 

(N)                               ERISAEvents. Immediately after becoming aware of any ERISA Event, accompanied byany materials required to be filed with the PBGC with respect thereto;immediately after Borrower’s or any of its Subsidiaries’ receipt of any noticeconcerning the imposition of any withdrawal liability under Section 4042of ERISA with respect to a Plan; immediately upon the establishment of anyPension Plan not existing at the Closing Date or the commencement ofcontributions by Borrower or any of its Subsidiaries to any Pension Plan towhich Borrower or any of its Subsidiaries was not contributing at the ClosingDate; and immediately upon becoming aware of any other event or conditionregarding a Plan or Borrower’s, or any of its Subsidiaries’ or an ERISAAffiliate’s compliance with ERISA which could reasonably be expected to have aMaterial Adverse Effect, Borrower will give notice to Administrative Agent andLenders thereof and provide such other information as may be reasonablyavailable to Borrower to enable Administrative Agent and Lenders to reasonablyevaluate such matter.

 

(O)                               OtherInformation. With reasonable promptness, Borrower will deliver such otherinformation and data with respect to Borrower and any of its Subsidiaries asfrom time to time may be reasonably requested by Administrative Agent,Collateral Agent or any Lender.

 

4.6                                 AccountingTerms; Utilization of GAAP for Purposes of Calculations Under Agreement. Forpurposes of this Agreement, all accounting terms not otherwise defined hereinshall have the meanings assigned to such terms in conformity with GAAP. Exceptas otherwise expressly provided, financial statements and other informationfurnished to Administrative Agent pursuant to this Agreement shall be preparedin accordance with GAAP as in effect at the time of such preparation. No AccountingChanges (as defined below) shall affect financial covenants, standards or termsin this Agreement; provided that Borrower shall prepare footnotes toeach Compliance Certificate and the financial statements required to bedelivered hereunder that show the differences between the financial statementsdelivered (which reflect such Accounting Changes) and the basis for calculatingfinancial covenant compliance in accordance with GAAP as in effect as of theClosing Date (without reflecting such Accounting Changes). “**Accounting Changes**” means:  (i) changes in accounting principlesrequired by GAAP and implemented by Borrower or any Subsidiary of Borrower; (ii) changesin accounting principles recommended by Borrower’s certified

 

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public accountants andimplemented by Borrower or any Subsidiary of Borrower; and (iii) changesin the method of determining carrying value of Borrower’s or any of itsSubsidiary’s assets, liabilities or equity accounts. All such adjustmentsresulting from expenditures made subsequent to the Closing Date (including, butnot limited to, capitalization of costs and expenses or payment of pre-ClosingDate liabilities) shall be treated as expenses in the period the expendituresare made.

 

# SECTION 5REPRESENTATIONS AND WARRANTIES

#  

In order to induceAdministrative Agent and Lenders to enter into this Agreement and to makeLoans, Borrower hereby represents and warrants to Administrative Agent and eachLender on the Closing Date (taking into account the consummation of theAcquisition), the Amendment Date and on the date of each request for a Loan orthe issuance of a Letter of Credit that the following statements are true,correct and complete; provided, such statements shall take into accountthe completion of the Acquisition:

 

5.1                                 Disclosure.The information furnished by or on behalf of Borrower and its Subsidiariescontained in this Agreement, the financial statements referred to in Subsection 5.8and any other document, certificate, opinion or written statement furnished toAdministrative Agent or any Lender pursuant to this Agreement or any other LoanDocument (other than projections), taken as a whole, does not contain anyuntrue statement of a material fact or omit to state a material fact necessaryin order to make the statements contained herein or therein not misleading inlight of the circumstances in which the same were made. Any projectionsprovided by or on behalf of Borrower and its Subsidiaries have been prepared bymanagement in good faith and based upon assumptions believed by management tobe reasonable at the time the projections were prepared. Borrower is not awareof any fact which it has not disclosed in writing to Administrative Agenthaving or which could reasonably be expect to have a Material Adverse Effect.

 

5.2                                 NoMaterial Adverse Effect. Since the Closing Date, there has been no event orchange in facts or circumstances affecting Borrower or any of its Subsidiarieswhich individually or in the aggregate have had or could reasonably be expectedto have a Material Adverse Effect and that have not been disclosed herein or inthe attached Schedules.

 

5.3                                 Organization,Powers, Authorization and Good Standing.

 

(A)                              Organizationand Powers. Borrower and its Subsidiaries are limited liability companies,corporations or partnerships duly organized, validly existing and in goodstanding under the laws of its jurisdiction of organization or incorporation(which jurisdiction is set forth on Schedule 5.3(A)). Except asdisclosed on Schedule 5.3(A), Borrower and its Subsidiaries haveall requisite legal power and authority to own and operate its properties, tocarry on its business as now conducted and proposed to be conducted, to enterinto each Loan Document to which it is a party and to carry out its respectiveobligations with respect thereto.

 

(B)                                Authorization;Binding Obligation. Borrower and its Subsidiaries have taken all necessarylimited liability company, partnership, corporate and other action to authorizethe

 

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execution, delivery andperformance of this Agreement and each of the other Loan Documents to which itis a party. This Agreement is, and the other Loan Documents when executed anddelivered will be, the legally valid and binding obligations of the applicableparties thereto (other than Administrative Agent and Lenders), each enforceableagainst each of such parties, as applicable, in accordance with theirrespective terms, except as such enforcement may be limited by bankruptcy,insolvency, reorganization, moratorium or similar state or federal debt orrelief laws from time to time in effect which affect the enforcement ofcreditors’ rights in general and general principles of equity.

 

(C)                                Qualification.Borrower and its Subsidiaries are duly qualified and authorized to do businessand in good standing in each jurisdiction where the nature of its business andoperations requires such qualification and authorization, except where thefailure to be so qualified, authorized and in good standing could notreasonably be expected to have a Material Adverse Effect. All jurisdictions inwhich each such Person is qualified and authorized to do business are set forthon Schedule 5.3(C).

 

5.4                                 Complianceof Agreement, Loan Documents and Borrowings with Applicable Law. Theexecution, delivery and performance by Borrower and its Subsidiaries of theLoan Documents to which each such Person is a party, the borrowings hereunderand the transactions contemplated hereby and thereby do not and will not, bythe passage of time, the giving of notice or otherwise, (i) require anyGovernmental Approval or violate any Applicable Law relating to Borrower or anyof its Subsidiaries, (ii) conflict with, result in a breach of orconstitute a default under the articles of incorporation, bylaws or otherorganizational documents of Borrower or its Subsidiaries or any MaterialContract to which such Person is a party or by which any of its properties may bebound or any Governmental Approval relating to such Person or (iii) exceptas required or permitted under the Loan Documents, result in or require thecreation or imposition of any Lien upon or with respect to any property nowowned or hereafter acquired by such Person.

 

5.5                                 Compliancewith Law; Governmental Approvals. Borrower and its Subsidiaries (i) have,or have the right to use, all material Governmental Approvals, including theFranchises and the Licenses, required by any Applicable Law for it to conductits business, and (ii) are in material compliance with each GovernmentalApproval, including the Franchises and the Licenses, applicable to it and incompliance with all other Applicable Laws relating to it or any of itsrespective properties the violation of which could reasonably be expected tohave a Material Adverse Effect.

 

5.6                                 TaxReturns and Payments. Borrower and its Subsidiaries have duly filed orcaused to be filed all federal, state, local and other tax returns required byApplicable Law to be filed, and have paid, or made adequate provision for thepayment of, all federal, state, local and other taxes, assessments andgovernmental charges or levies upon it and its property, income, profits andassets which are due and payable, except where the payment of such taxis being diligently contested in good faith and adequate reserves therefor havebeen established in compliance with GAAP. The charges, accruals and reserves onthe books of Borrower and its Subsidiaries in respect of federal, state, localand other taxes for all fiscal years and portions thereof are in the judgmentof Borrower adequate, and Borrower and its Subsidiaries do not anticipate anyadditional material taxes or assessments for any of such years.

 

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5.7                                 EnvironmentalMatters. Borrower and its Subsidiaries are in compliance in all materialrespects with all applicable Environmental Laws, and there is no contaminationat, under or about such properties or such operations which interfere in anymaterial respect with the continued operation of such properties or impair inany material respect the fair saleable value thereof or with such operations,except for any such violations or contamination as could not reasonably beexpected to have, individually or in the aggregate, a Material Adverse Effect.

 

5.8                                 FinancialStatements.

 

(A) All financial statements concerning Borrowerand its Subsidiaries which have been furnished to Administrative Agent andLenders pursuant to this Agreement have been prepared in accordance with GAAPconsistently applied (except as disclosed therein) and present fairly in allmaterial respects the financial condition of the Persons covered thereby as ofthe date thereof and the results of their operations for the periods covered therebyand do and will disclose all material liabilities and Contingent Obligations ofany of Borrower or its Subsidiaries as at the dates thereof.

 

(B)                                AllBudgets concerning Borrower and its Subsidiaries which have been furnished toAdministrative Agent or Lenders were prepared in good faith by or on behalf ofBorrower and such Subsidiaries. No fact is known to Borrower which materiallyand adversely affects or is reasonably expected to have a Material AdverseEffect which has not been set forth in the financial statements referred to inSubsection 5.8(A) or in such information, reports, papers and data orotherwise disclosed in writing to Administrative Agent or Lenders prior to theClosing Date.

 

5.9                                 IntellectualProperty. Borrower and its Subsidiaries own, or possess through validlicensing arrangements, the right to use all patents, copyrights, trademarks,trade names, service marks, technology know-how and processes necessary for theconduct of its business as currently or anticipated to be conducted (collectively,the “**Intellectual Property Rights**”)without infringing upon any validly asserted rights of others, except for anyIntellectual Property Rights to absence of which could not reasonably beexpected to have a Material Adverse Effect. No event has occurred whichpermits, or after notice or lapse of time or both would permit, the revocationor termination of any such rights. Neither Borrower nor its Subsidiaries havebeen threatened in writing with any litigation regarding Intellectual PropertyRights that would present a material impediment to the business of any suchPerson.

 

5.10                           Litigation,Investigations, Audits, Etc. Except as set forth on Schedule 5.10,there is no action, suit, proceeding or investigation pending against, or, tothe knowledge of Borrower, threatened against Borrower or its Subsidiaries orany of their respective properties, including the Licenses, in any court orbefore any arbitrator of any kind or before or by any Governmental Authority(including the FCC), except such as (i) affect the telecommunicationsindustry generally, (ii) do not call into question the validity orenforceability of this Agreement or any other Loan Document or any lien orsecurity interest created hereunder, or (iii) individually or collectivelywould not reasonably be expected to have a Material Adverse Effect. Except asset forth on Schedule 5.10, to Borrower’s knowledge, none ofBorrower and its Subsidiaries are the subject of any review or audit by theInternal Revenue Service or any investigation by any Governmental Authorityconcerning the violation or possible violation of any law (other than routineIRS audits).

 

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5.11                           EmployeeLabor Matters. Except as set forth on Schedule 5.11, (i) neitherof Borrower nor its Subsidiaries nor any of their respective employees issubject to any collective bargaining agreement, (ii) no petition forcertification or union election is pending with respect to the employees of anysuch Person and no union or collective bargaining unit has sought suchcertification or recognition with respect to the employees of any such Personand (iii) there are no strikes, slowdowns, unfair labor practicecomplaints, work stoppages or controversies pending or, to the bestknowledge of Borrower after due inquiry, threatened between any such Person andits respective employees, other than employee grievances arising in theordinary course of business which could not reasonably be expected to have,either individually or in the aggregate, a Material Adverse Effect.

 

5.12                           ERISACompliance.

 

#### (A)                              EachPlan is in compliance in all material respects with the applicable provisionsof ERISA, the IRC and other federal or state law. Each Plan which is intendedto qualify under Section 401(a) of the IRC has received a favorabledetermination letter from the Internal Revenue Service and to the bestknowledge of Borrower, nothing has occurred that would cause the loss of suchqualification. Borrower and each ERISA Affiliate has made all required contributionsto any Plan subject to Section 412 of the IRC, and no application for afunding waiver or an extension of any amortization period pursuant to Section 412of the IRC has been made with respect to any Plan.

####  

#### (B)                                Thereare no pending or, to the best knowledge of Borrower, threatened claims,actions or lawsuits, or action by any Governmental Authority, with respect toany Plan which has resulted or could reasonably be expected to have a MaterialAdverse Effect. There has been no prohibited transaction or violation of thefiduciary responsibility rules with respect to any Plan which has resultedor could reasonably be expected to have a Material Adverse Effect.

####  

#### (C)                                (i) NoERISA Event has occurred or is reasonably expected to occur; (ii) noPension Plan has any unfunded liability; (iii) no Borrower nor any ERISAAffiliate has incurred, or reasonably expects to incur, any liability underTitle IV of ERISA with respect to any Pension Plan (other than premiums due andnot delinquent under Section 4007 of ERISA); (iv) neither Borrowernor any ERISA Affiliate has incurred, or reasonably expects to incur, anyliability (and no event has occurred which, with the giving of notice under Section 4219of ERISA, would result in such liability) under Section 4201 or 4243 ofERISA with respect to a Multi-employer Plan; and (v) neither Borrower norany ERISA Affiliate has engaged in a transaction that could subject any Personto Section 4069 or 4212(c) of ERISA.

####  

5.13                           CommunicationsRegulatory Matters.

 

#### (A)                              Schedule 5.13(A) setsforth a true and complete list of the following information for each Franchiseand License issued to or utilized by Borrower and its Subsidiaries:  the name of the licensee, the type ofservice, the expiration date and the geographic area covered by such License.

 

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#### (B)                                Otherthan as set forth on Schedule 5.13(B), the Franchises and theLicenses are valid and in full force and effect without conditions except forsuch conditions as are generally applicable to holders of such Franchise andsuch Licenses. No event has occurred and is continuing which could reasonablybe expected to (i) result in the imposition of a material forfeiture orthe revocation, termination or adverse modification of any such Franchise andsuch License or (ii) materially and adversely affect any rights ofBorrower or its Subsidiaries thereunder. Borrower has no reason to believe andhas no knowledge that any Franchise or any License will not be renewed in theordinary course. Neither Borrower nor any of its Subsidiaries is a party to anyinvestigation, notice of violation, order or complaint issued by or before theFCC or any applicable Governmental Authority, and there are no proceedingspending by or before the FCC or any applicable Governmental Authority whichcould in any manner threaten or adversely affect the validity of any Franchiseor any License.

####  

#### (C)                                Allof the material properties, equipment and systems owned, leased or managed byBorrower and its Subsidiaries are, and (to the best knowledge of Borrower) allsuch property, equipment and systems to be acquired or added in connection withany contemplated system expansion or construction will be, in good repair,working order and condition (reasonable wear and tear excepted) and are andwill be in compliance with all terms and conditions of the Franchises and theLicenses and all standards or rules imposed by any Governmental Authorityor as imposed under any agreements with telecommunications companies andcustomers.

####  

#### (D)                               Borrowerand its Subsidiaries have paid all material franchise, license or other feesand charges which have become due pursuant to any Governmental Approval inrespect of its and their business and has made appropriate provision as isrequired by GAAP for any such fees and charges which have accrued.

####  

5.14                           Perfectionand Priority. The Security Interest is a valid and perfected first prioritylien, security title or security interest in the Collateral in favor ofAdministrative Agent, for the benefit of itself and Lenders, securing, inaccordance with the terms of the Security Documents, the Obligations, and theCollateral is subject to no Lien other than permitted pursuant to Subsection 3.2.The Security Interest is enforceable as security for the Obligations inaccordance with its terms.

 

5.15                           Solvency.Borrower and its Subsidiaries:  (i) ownand will own assets the present fair saleable value of which are (a) greaterthan the total amount of liabilities (including contingent liabilities) ofBorrower and its Subsidiaries, and (b) greater than the amount that willbe required to pay the probable liabilities of Borrower’s and its Subsidiaries’then existing debts and liabilities as they become absolute and maturedconsidering all financing alternatives and potential asset sales reasonablyavailable to Borrower and its Subsidiaries; (ii) have capital that is notunreasonably small in relation to its business as presently conducted or aftergiving effect to any contemplated transaction; and (iii) does not intendto incur and does not believe that it will incur debts and liabilities beyondits ability to pay such debts and liabilities as they become due.

 

5.16                           InvestmentCompany Act. Neither Borrower nor any of its Subsidiaries is required toregister under, or is otherwise subject to regulation as an “investment company”as that term is defined in, the Investment Company Act of 1940, as amended.

 

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5.17                           MaterialContracts. As of the Amendment Date, Schedule 5.17 sets forth acomplete and accurate list of all Material Contracts of Borrower and itsSubsidiaries. Borrower and its Subsidiaries have performed all of its materialobligations under such Material Contracts and, to the knowledge of Borrower,each other party thereto is in material compliance with each such MaterialContract.

 

5.18                           Titleto Properties. Borrower and its Subsidiaries have such title or leaseholdinterest in and to the real property or interests therein, including easements,licenses and similar rights in real estate, owned or leased by it as isnecessary to the conduct of its business and valid and legal title or leaseholdinterest in and to all of its personal property, including those reflected onthe balance sheets of Borrower and its Subsidiaries delivered as described inSubsection 5.8, except those which have been disposed of by Borrowersubsequent to such date which dispositions have been in the ordinary course ofbusiness or as otherwise expressly permitted hereunder.

 

5.19                           Subsidiaries.Schedule 5.19 sets forth a complete and accurate list of all direct orindirect Subsidiaries of Borrower as of the Amendment Date, including for eachsuch Subsidiary whether such Subsidiary is wholly owned by Borrower, and ifnot, the percentage ownership of Borrower or its Subsidiary in such Subsidiary.

 

5.20                           Transactionswith Affiliates. No Affiliate of Borrower is a party to any agreement,contract, commitment or transaction with Borrower or has any material interestin any material property used by Borrower, except as permitted by Subsections3.8 and 3.9.

 

5.21                           PatriotAct. Each of Borrower and its Subsidiaries is in compliance, in allmaterial respects, with the (i) Trading with the Enemy Act, as amended,and each of the foreign assets control regulations of the United StatesTreasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any otherenabling legislation or executive order relating thereto, and (ii) UnitingAnd Strengthening America By Providing Appropriate Tools Required To InterceptAnd Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceedsof the Loans will be used, directly or indirectly, for any payments to anygovernmental official or employee, political party, official of a politicalparty, candidate for political office, or anyone else acting in an officialcapacity, in order to obtain, retain or direct business or obtain any improperadvantage, in violation of the United States Foreign Corrupt Practices Act of1977, as amended.

 

# SECTION 6EVENTS OF DEFAULT AND RIGHTS AND REMEDIES

#  

6.1                                 Eventof Default. “**Event of Default**”shall mean the occurrence or existence of any one or more of the following:

 

(A)                              Payment.(i) Failure to repay any outstanding principal amount of the Loans at thetime required pursuant to this Agreement or to reimburse any Issuing Lenderwhen due for any payment made by such Issuing Lender under or with respect toany Letter of Credit (unless the Issuing Lender is otherwise reimbursed by aRevolver Loan pursuant to Section 1.1(E)(ii)), or (ii) failure to payany interest on any Loan or any other amount due under this Agreement or any ofthe

 

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other Loan Documents, andin the case of this clause (ii) such failure continues for three BusinessDays; or

 

(B)                                Defaultin Other Agreements. (i) Failure of any Borrower or any of itsSubsidiaries to pay when due or within any applicable grace period anyprincipal or interest on Indebtedness (other than the Loans) or any ContingentObligation; or (ii) any other breach or default of Borrower or any of itsSubsidiaries with respect to any Indebtedness (other than the Loans) or anyContingent Obligation if, in either case, the effect of such breach or defaultis to cause or to permit the holder or holders then to cause such Indebtednessor Contingent Obligation having an aggregate principal amount for Borrower andits Subsidiaries in excess of $1,000,000 to become or be declared due prior toits stated maturity; or

 

(C)                                Breachof Certain Provisions. Failure of Borrower or any Subsidiary of Borrower toperform or comply with any term or condition contained in that portion ofSubsection 2.2 relating to Borrower’s and its Subsidiaries’ obligation tomaintain insurance, Subsection 2.5, Section 3 or Section 4(excluding Subsection 4.6); or

 

(D)                               Breachof Warranty. Any representation, warranty, certification or other statementmade by Borrower or any of its Subsidiaries in any Loan Document or in anystatement or certificate at any time given by Borrower or any of its Subsidiariesin writing pursuant to any Loan Document is false in any material respect onthe date made or deemed made; or

 

(E)                                 OtherDefaults Under Loan Documents. Borrower or any of its Subsidiaries breachesor defaults in the performance of or compliance with any term contained in thisAgreement or the other Loan Documents and such default is not remedied orwaived within 45 days after receipt by any Borrower or such other party ofnotice from Administrative Agent or Requisite Lenders of such default (other thanoccurrences described in other provisions of this Subsection 6.1 for whicha different grace or cure period is specified or which constitute immediateEvents of Default); or

 

(F)                                 InvoluntaryBankruptcy; Appointment of Receiver; Etc. (i) A court enters a decreeor order for relief with respect to Borrower of any of its Subsidiaries in aninvoluntary case under the Bankruptcy Code, which decree or order is not stayedor other similar relief is not granted under any applicable federal or statelaw within 60 days; or (ii) the continuance of any of the following eventsfor 60 days unless dismissed, bonded or discharged:  (a) an involuntary case is commencedagainst Borrower or any of its Subsidiaries under any applicable bankruptcy,insolvency or other similar law now or hereafter in effect; or (b) adecree or order of a court for the appointment of a receiver, liquidator,sequestrator, trustee, custodian or other officer having similar powers overBorrower or any of its Subsidiaries or over all or a substantial part ofits property, is entered; or (c) an interim receiver, trustee or othercustodian is appointed without the consent of Borrower or any of itsSubsidiaries, for all or a substantial part of the property of Borrower orany of its Subsidiaries; or

 

(G)                                VoluntaryBankruptcy; Appointment of Receiver; Etc. Borrower (i) commences avoluntary case under the Bankruptcy Code, files a petition seeking to takeadvantage of any other law relating to bankruptcy, insolvency, reorganization,winding up or composition for adjustment of its debts, or consents to, or failsto contest in a timely and appropriate manner, the entry of an order for reliefin an involuntary case, the conversion of an involuntary case to a 

 

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voluntary case under anysuch law, or the appointment of or taking possession by a receiver, trustee orother custodian of all or a substantial part of its property; or (ii) makesany assignment for the benefit of creditors; or (iii) the Board of Directorsof Borrower or any of its Subsidiaries adopts any resolution or otherwiseauthorizes action to approve any of the actions referred to in this Subsection 6.1(G);or

 

(H)                               GovernmentalLiens. Any Lien, levy or assessment (other than Permitted Encumbrances) isfiled or recorded with respect to or otherwise imposed upon all or any part ofthe Collateral or the other assets of Borrower or any of its Subsidiaries bythe United States or any other country or any department or instrumentalitythereof or by any state, county, municipality or other Governmental Authorityand remains undischarged, unvacated, unbonded or unstayed for a period of 30days or in any event later than five Business Days prior to the date of anyproposed sale thereunder; or

 

(I)                                    Judgmentand Attachments. Any money judgment, writ or warrant of attachment orsimilar process (other than those described in Subsection 6.1(H))involving an amount in any individual case or in the aggregate for or againstBorrower or any of its Subsidiaries at any time in excess of $1,000,000 (ineither case not adequately covered by insurance as to which the insurancecompany has not denied coverage) is entered or filed against Borrower or any ofits Subsidiaries and/or any of its respective assets and remains undischarged,unvacated, unbonded or unstayed for a period of 60 days or in any event laterthan five Business Days prior to the date of any proposed sale thereunder; or

 

(J)                                   Dissolution.Any order, judgment or decree is entered against Borrower or any of its Subsidiariesdecreeing the dissolution or split up of Borrower or any of its Subsidiariesand such order remains undischarged or unstayed for a period in excess of 30days; or

 

(K)                               Solvency.Borrower or any of its Subsidiaries ceases to be solvent or Borrower admits inwriting its present or prospective inability to pay its debts as they becomedue; or

 

(L)                                 Injunction.Borrower or any of its Subsidiaries is enjoined, restrained or in any wayprevented by the order of any court or any Governmental Authority fromconducting all or any substantial part of its business and such ordercontinues for more than 15 days; or

 

(M)                            ERISA;Pension Plans. (i) Borrower or any of its Subsidiaries fails to makefull payment when due of all amounts which, under the provisions of anyemployee benefit plans or any applicable provisions of the IRC, any such Personis required to pay as contributions thereto and such failure results in orcould reasonably be expected to have a Material Adverse Effect; or (ii) anaccumulated funding deficiency occurs or exists, whether or not waived, withrespect to any such employee benefit plans; or (iii) any employee benefitplan of Borrower or any of its Subsidiaries loses its status as a qualifiedplan under the IRC and such loss results in or could reasonably be expected tohave a Material Adverse Effect; or

 

(N)                               EnvironmentalMatters. Borrower or any of its Subsidiaries fails to: (i) obtain ormaintain any operating licenses or permits required by environmentalauthorities; (ii) begin, continue or complete any remediation activitiesas required by any environmental authorities;

 

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(iii) store ordispose of any hazardous materials in accordance with applicable EnvironmentalLaws; or (iv) comply with any other Environmental Laws, if in any suchcase such failure could reasonably be expected to have a Material AdverseEffect; or

 

(O)                               Invalidityof Loan Documents. Any of the Loan Documents for any reason, other than apartial or full release in accordance with the terms thereof, ceases to be infull force and effect or is declared to be null and void, or Borrower or any ofits Subsidiaries denies that it has any further liability under any LoanDocuments to which it is party, or gives notice to such effect; or

 

(P)                                 Damage;Strike; Casualty. Any material damage to, or loss, theft or destruction of,any material portion of the Collateral, whether or not insured, or any strike,lockout, labor dispute, embargo, condemnation, act of God or public enemy, or othercasualty which causes, for more than 30 days, the cessation or substantialcurtailment of revenue producing activities at any facility of Borrower or anyof its Subsidiaries if any such event or circumstance results in or couldreasonably be expected to have a Material Adverse Effect; or

 

(Q)                               Franchises,Licenses, Permits and Contracts. (i) The loss, suspension orrevocation of, or failure to renew, any license or permit now held or hereafteracquired or utilized by Borrower or any of its Subsidiaries, if such loss,suspension, revocation or failure to renew could reasonably be expected to havea Material Adverse Effect; (ii) one or more Franchises or Licenses shallbe terminated, revoked, modified or fail to be renewed at its statedexpiration; or (iii) any breach, default or termination shall haveoccurred under any Material Contract by any of the parties thereto, or anyMaterial Contract shall fail to be renewed or otherwise have ceased to be infull force and effect, and such breach, default, failure, cessation ortermination could have a Material Adverse Effect, unless such Material Contractis replaced by a comparable Material Contract (in the judgment ofAdministrative Agent) prior to or concurrent with such breach, default,failure, cessation or termination; or

 

(R)                                Failureof Security. Administrative Agent, for the benefit of itself, and Lenders,does not have or ceases to have a valid and perfected first priority securityinterest (subject to Permitted Encumbrances) in the Collateral or any substantialportion thereof; or

 

(S)                                 Changein Control. A Change of Control occurs, or Borrower, other than as a resultof a transaction not prohibited hereunder, fails to own the percentageownership interests in its Subsidiaries that it owns as of the Amendment Date(or on the date of acquisition or formation of such Subsidiary), taking intoaccount the consummation of the Acquisition; or

 

(T)                                Expropriation.Any federal, state or local Government Authority takes any action toexpropriate or condemn all or any substantial portion of the assets of Borroweror of any of its Subsidiaries.

 

6.2                                 Suspensionof Loan Commitments. Upon the occurrence and during the continuation of anyDefault or Event of Default, and without limiting any other right or remedyhereunder, each Lender, without notice or demand, may immediately ceasemaking additional Loans and issuing Letters of Credit and cause its obligationto lend its Pro Rata Share of the Loan Commitments to be suspended; providedthat, in the case of a Default, if the subject condition or event is cured by

 

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Borrower to thereasonable satisfaction of Requisite Lenders or waived or removed by RequisiteLenders within any applicable grace or cure period, any suspended portion ofthe Loan Commitments shall be reinstated.

 

6.3                                 Acceleration.Upon the occurrence of any Event of Default described in the foregoingSubsections 6.1(F) or 6.1(G), the unpaid principal amount of and accruedinterest and fees on the Loans, all Letter of Credit Liability and all otherObligations (other than Obligations under any Related Interest Rate Agreementto which a Lender or an Affiliate of a Lender is a party, which may beaccelerated solely in the discretion of the Lender or Affiliate of a Lenderparty thereto) shall automatically become immediately due and payable, withoutpresentment, demand, protest, notice of intent to accelerate, notice ofacceleration or other requirements of any kind, all of which are herebyexpressly waived by Borrower, and the obligations of Lenders to make Loans andissue Letters of Credit shall thereupon terminate. Upon the occurrence andduring the continuance of any other Event of Default, Administrative Agent may,and upon written demand by Requisite Lenders shall, by written notice toBorrower, declare all or any portion of the Loans, all or some portion of theLetter of Credit Liability and all or some of the other Obligations (other thanObligations under any Related Interest Rate Agreement to which a Lender or anAffiliate of a Lender is a party, which may be accelerated solely in thediscretion of the Lender or Affiliate of a Lender party thereto) to be, and thesame shall forthwith become, immediately due and payable together with accruedinterest thereon, and upon such acceleration the obligations of AdministrativeAgent and Lenders to make Loans and issue Letters of Credit shall thereuponterminate.

 

6.4                                 Rightsof Collection. Upon the occurrence and during the continuation of any Eventof Default and at any time thereafter, unless and until such Event of Defaultis cured, or waived or removed by Requisite Lenders, Administrative Agent may exerciseon behalf of Lenders all of their other rights and remedies under thisAgreement, the other Loan Documents and Applicable Law, in order to satisfy allof the Obligations.

 

6.5                                 Consents.Borrower acknowledges that certain transactions contemplated by this Agreementand the other Loan Documents and certain actions which may be taken byAdministrative Agent or Lenders in the exercise of their respective rightsunder this Agreement and the other Loan Documents may require the consentof a Governmental Authority. If Administrative Agent reasonably determines thatthe consent of a Governmental Authority is required in connection with theexecution, delivery and performance of any of the aforesaid Loan Documents orany Loan Documents delivered to Administrative Agent or Lenders in connectiontherewith or as a result of any action which may be taken pursuantthereto, then Borrower, at Borrower’s cost and expense, agrees to usereasonable best efforts, and to cause its Subsidiaries to use their bestefforts, to secure such consent and to cooperate with Administrative Agent andLenders in any action commenced by Administrative Agent or any Lender to securesuch consent.

 

6.6                                 Performanceby Administrative Agent. If Borrower shall fail to perform anycovenant, duty or agreement contained in any of the Loan Documents,Administrative Agent may perform or attempt to perform suchcovenant, duty or agreement on behalf of Borrower after the expiration of anycure or grace periods set forth herein. In such event, Borrower shall beobligated, at the request of Administrative Agent, to promptly pay any amountreasonably expended by Administrative Agent in such performance or attemptedperformance to Administrative Agent, together with interest

 

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thereon at the highestrate of interest in effect upon the occurrence of an Event of Default as specifiedin Subsection 1.2(E) from the date of such expenditure until paid.Notwithstanding the foregoing, it is expressly agreed that Administrative Agentshall not have any liability or responsibility for the performance of anyobligation of Borrower under this Agreement or any other Loan Document.

 

6.7                                 SetOff and Sharing of Payments. In addition to any rights now or hereaftergranted under applicable law and not by way of limitation of any such rights,during the continuance of any Event of Default, each Lender is herebyauthorized by Borrower at any time or from time to time, with reasonably promptsubsequent notice to Borrower or any of its Subsidiaries (any prior orcontemporaneous notice being hereby expressly waived) to set off and toappropriate and to apply any and all (A) balances held by such Lender atany of its offices for the account of Borrower or any of its Subsidiaries(regardless of whether such balances are then due to Borrower), and (B) exceptas provided in Subsection 8.2(J), other property at any time held or owingby such Lender to or for the credit or for the account of Borrower or any ofits Subsidiaries, against and on account of any of the Obligations; provided,that no Lender shall exercise any such right without the prior written consentof Administrative Agent. Any Lender exercising a right to set off shall, to theextent the amount of any such set off exceeds its Pro Rata Share of the amountset off, purchase for cash (and the other Lenders shall sell) interests in eachsuch other Lender’s Pro Rata Share of the Obligations as would be necessary tocause such Lender to share such excess with each other Lender in accordancewith their respective Pro Rata Shares. Borrower agrees, to the fullest extentpermitted by law, that any Lender may exercise its right to set off withrespect to amounts in excess of its Pro Rata Share of the Obligations and upondoing so shall deliver such excess to Administrative Agent for the benefit ofall Lenders in accordance with their Pro Rata Shares; provided, thatCoBank may exercise its rights against any equity of CoBank held byBorrower without complying with this Subsection 6.7.

 

6.8                                 Applicationof Payments. Subsequent to the acceleration of the Loans pursuant to Subsection 6.3,all payments received by Lenders (or Affiliates of Lenders party to RelatedInterest Rate Agreements) on the Obligations and on the proceeds from theenforcement of the Obligations shall be applied among Administrative Agent andLenders (and Affiliates of Lenders party to Related Interest Rate Agreements)as follows:  first, to all AdministrativeAgent’s, and Lenders’ (and Affiliates of Lenders party to Related Interest RateAgreements) fees and expenses then due and payable; then to all other expensesthen due and payable by Borrower under the Loan Documents; then to allindemnitee obligations then due and payable by Borrower under the LoanDocuments; then to all commitment and other fees and commissions then due andpayable by Borrower under the Loan Documents; then pro rata to (i) accruedand unpaid interest on the Loans (pro rata) in accordance with all such amountsdue on the Loans and (ii) any scheduled payments (excluding termination,unwind and similar payments) due to a Lender or an Affiliate of a Lender on anyRelated Interest Rate Agreements (pro rata with all such amounts due); then prorata to (a) the principal amount of the Loans (pro rata among all Loans)and (b) any termination, unwind and similar payments due to a Lender or anAffiliate of a Lender under Related Interest Rate Agreements (pro rata with allsuch amounts due); and then to any remaining amounts due under the Obligations,in that order (provided, such priority may be changed with the consent ofboth the Requisite Lenders and the Lenders (and Affiliates of Lenders) party toRelated Interest Rate Agreements then outstanding). Any remaining monies notapplied as provided in this Subsection 6.8 shall be paid to Borrower orany Person lawfully entitled thereto.

 

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6.9                                 Adjustments.If any Lender (a “**Benefited Lender**”)shall at any time receive any payment of all or part of its Loans, orinterest thereon in a greater proportion than any such payment received by anyother Lender (other than pursuant to Subsection 1.12(B)), if any, inrespect of such other Lender’s Loans, or interest thereon, such BenefitedLender shall, to the extent permitted by Applicable Law, purchase for cash fromthe other Lenders such portion of each such other Lender’s Loans as shall benecessary to cause such Benefited Lender to share the excess payment orbenefits ratably with each Lender; provided, that if all or any portionof such excess payment or benefits is thereafter recovered from such BenefitedLender, such purchase shall be rescinded, and the purchase price and benefitsreturned to the extent of such recovery, but without interest. Borrower agreesthat each Lender so purchasing a portion of another Lender’s Loans may exerciseall rights of payment (including rights of set-off) with respect to suchportion as fully as if such Lender were the direct holder of such portion. ThisSubsection 6.9 shall not apply to any action taken by CoBank with respectto equity in it held by Borrower.

 

# SECTION 7CONDITIONS TO LOANS

#  

The obligations of Lenders to make Loans are subjectto satisfaction of all of the applicable conditions set forth below.

 

7.1                                 Conditionsto Initial Loan. The obligations of Lenders on or after the Closing Date tomake the initial Loan under either of the Facilities are, in addition to theconditions precedent specified in Subsection 7.2, subject to thesatisfaction of each of the following conditions:

 

(A)                              ExecutedLoan Documents. (i) This Agreement, (ii) the Notes, (iii) theSecurity Agreements, (iv) the Guarantees and (v) all other documents,financing statements and instruments contemplated by such agreements(including, without limitation, landlord waivers and consents), shall have beenduly authorized and executed by Borrower, in form and substancesatisfactory to Administrative Agent, and Borrower shall have deliveredsufficient original counterparts thereof to Administrative Agent for deliveryto Lenders.

 

(B)                                ControlAgreements. Administrative Agent shall have received executed accountcontrol agreements with respect to Borrower’s deposit and securities accountsas shall have been specified by Administrative Agent, in form andsubstance satisfactory to Administrative Agent, from the appropriate depositoryinstitutions or other entities holding such deposit accounts.

 

(C)                                ClosingCertificates; Opinions.

 

##### (1)                                  Officer’sCertificate. Administrative Agent shall have received a certificate fromthe chief executive officer, chief operating officer or chief financial officerof Borrower in form and substance reasonably satisfactory toAdministrative Agent, to the effect that, to their knowledge, allrepresentations and warranties of Borrower contained in this Agreement and theother Loan Documents are true, correct and complete; that Borrower is not inviolation of any of the covenants contained in this Agreement and the otherLoan Documents; that, after giving effect to the transactions contemplated bythis Agreement, no Default or Event of Default has occurred and is

 

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##### continuing; that Borrower hassatisfied each of the closing conditions to be satisfied hereby; and thatBorrower has filed all required tax returns and owes no delinquent taxes.

#####  

##### (2)                                  Certificatesof Secretary. Administrative Agent shall have received a certificate of thesecretary or assistant secretary of each of Borrower and Commnet certifyingthat attached thereto is a true and complete copy of the articles ofincorporation of such Person and all amendments thereto, certified as of arecent date by the appropriate Governmental Authority in its jurisdiction oforganization; that attached thereto is a true and complete copy of the bylawsor operating agreement of such Person as in effect on the date of suchcertification; that attached thereto is a true and complete copy of resolutionsor consents of members duly adopted by the Board of Directors of such Personauthorizing the borrowings, pledges or guaranties contemplated hereunder, theexecution, delivery and performance of this Agreement and the other LoanDocuments, and the granting of the Security Interest; and as to the incumbencyand genuineness of the signature of each officer of such Person executing LoanDocuments.

#####  

##### (3)                                  Certificateas to Acquisition. Administrative Agent shall have received a certificateof the chief executive officer, chief operating officer or chief financialofficer of Borrower in form and substance reasonably satisfactory toAdministrative Agent, to the effect that (i) the Acquisition has beenconsummated in accordance with the terms and conditions set forth in thePurchase Agreement and (ii) Borrower has delivered to Administrative Agenttrue and complete copies of the Purchase Agreement and all other documentationrelated to the Acquisition as Administrative Agent shall reasonably have requested, including, to the extent reasonablyrequested, reliance letters for any opinion of counsel.

#####  

##### (4)                                  Certificatesof Good Standing. Administrative Agent shall have received certificates asof a recent date of the good standing of Borrower and its Subsidiaries underthe laws of their respective jurisdictions of organization and such otherjurisdictions as are requested by Administrative Agent.

#####  

##### (5)                                  Opinionsof Counsel. Administrative Agent shall have received favorable opinions ofcounsel to Borrower addressed to Administrative Agent and Lenders with respectto Borrower covering such matters as may be reasonably requested byAdministrative Agent, including, without limitation, the Loan Documents, theSecurity Interest, due authorization and other corporate matters and regulatorymatters (including the Licenses) and which are reasonably satisfactory in form andsubstance to Administrative Agent.

#####  

(D)                               Collateral.

 

##### (1)                                  CollateralPledge. Borrower and Commnet shall have effectively and validly pledged andperfected the Collateral contemplated by the Security Documents, including thepledge of all of the capital stock of Borrower in Commnet, Guyana Telephone &Telegraph Company Limited and Choice Communications, LLC.

#####  

##### (2)                                  Filingsand Recordings. All filings and recordings (including, without limitation,all mortgages, fixture filings and transmitting utility filings) that arenecessary to perfect the Security Interest in the Collateral described in theSecurity Documents shall have been filed or

 

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##### recorded in all appropriatelocations and Administrative Agent shall have received evidence satisfactory toAdministrative Agent that such Security Interest constitutes a valid andperfected first priority Lien therein.

#####  

##### (3)                                  LienSearches. Borrower shall have delivered to Administrative Agent the resultsof a Lien search of all filings made against Borrower and its Subsidiariesunder the Uniform Commercial Code (and local tax and judgment filingoffices) as in effect in any jurisdiction in which any of its respective assetsare located, indicating, among other things, that each Borrower’s assets andthe ownership interests of Borrower are free and clear of any Lien, except forPermitted Encumbrances.

#####  

##### (4)                                  Insurance.Administrative Agent shall have received certificates of insurance andcertified copies of insurance policies in the form required under Subsection 2.2and the Security Documents and otherwise in form and substance reasonablysatisfactory to Administrative Agent.

#####  

(E)                                 Consents.

 

##### (1)                                  Governmentaland Third Party Approvals. Borrower shall have delivered to AdministrativeAgent all material and necessary approvals, authorizations and consents, ifany, of all Persons, Governmental Authorities, including the FCC and allapplicable PUCs, and courts having jurisdiction with respect to the executionand delivery of the Acquisition, this Agreement, the other Loan Documents, thegranting of the Security Interest, and all such approvals shall be in form andsubstance reasonably satisfactory to Administrative Agent.

#####  

##### (2)                                  Permitsand Licenses. Administrative Agent shall have received copies of allmaterial permits and licenses, including the Licenses, required underApplicable Laws for the conduct of Borrower’s and its Subsidiaries’ businesses.

#####  

##### (3)                                  NoInjunction, Etc. No action, proceeding, investigation, regulation orlegislation shall have been instituted, threatened or proposed before, nor anyadverse ruling received from, any Governmental Authority to enjoin, restrain orprohibit, or to obtain substantial damages in respect of, or which is relatedto or arises out of this Agreement or the other Loan Documents or theconsummation of the transactions contemplated hereby or thereby, or which, asdetermined by Administrative Agent in its reasonable discretion, would make itinadvisable to consummate the transactions contemplated by this Agreement andsuch other Loan Documents.

#####  

(F)                                 FinancialMatters.

 

##### (1)                                  Fees,Expenses, Taxes, Etc. There shall have been paid by Borrower to AdministrativeAgent the fees set forth or referenced in Subsection 1.4 and any otheraccrued and unpaid fees or commissions due hereunder (including legal fees andexpenses), and to any other Person such amount as may be due thereto inconnection with the transactions contemplated hereby, including all taxes, feesand other charges in connection with the execution, delivery, recording, filingand registration of any of the Loan Documents.

 

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##### (2)                                  EquityContribution to Borrower. Administrative Agent shall have receivedevidence, in form and substance reasonably satisfactory to AdministrativeAgent, that Borrower has contributed $10,000,000 in cash to fund theAcquisition.

#####  

(G)                                Miscellaneous.

 

##### (1)                                  Proceedingsand Documents. All opinions, certificates and other instruments and allproceedings in connection with the transactions contemplated by this Agreementshall be reasonably satisfactory in form and substance to AdministrativeAgent. Administrative Agent shall have received copies of all other instrumentsand other evidence as Administrative Agent may request, in form andsubstance reasonably satisfactory to Administrative Agent, with respect to thetransactions contemplated by this Agreement and the taking of all actions inconnection therewith.

#####  

##### (2)                                  Litigation,Investigations, Audits, Etc. There shall be no action, suit, proceeding orinvestigation pending against, or, to the knowledge of Borrower, threatenedagainst Borrower or any of its properties, including the Franchises and theLicenses, in any court or before any arbitrator of any kind or before or by anyGovernmental Authority (including the FCC), except such as affect thetelecommunications industry generally, that could reasonably be expected tohave a Material Adverse Effect.

#####  

7.2                                 Conditionsto All Loans. The several obligations of Lenders to make Loans, includingthe initial Loan, and of any Issuing Lender to issue Letters of Credit, on anydate (each such date, a “**Funding Date**”)are subject to the further conditions precedent set forth below:

 

#### (A)                              AdministrativeAgent shall have received, in accordance with the provisions of Subsection 1.3,a Notice of Borrowing requesting an advance of a Loan, or, in accordance withthe provisions of Section 1.1(F)(iv),a notice requesting theissuance of a Letter of Credit.

####  

#### (B)                                Therepresentations and warranties contained in Section 5 of this Agreementand elsewhere herein and in the Loan Documents shall be (and each request byBorrower for a Loan or the issuance of a Letter of Credit shall constitute arepresentation and warranty by Borrower that such representations andwarranties are) true, correct and complete in all material respects on and asof such Funding Date to the same extent as though made on and as of that date,except for any representation or warranty limited by its terms to a specificdate and taking into account any amendments to the Schedules or Exhibits as aresult of any disclosures made in writing by Borrower to Administrative Agentafter the Amendment Date which disclosures are reasonably acceptable toAdministrative Agent.

####  

#### (C)                                Noevent shall have occurred and be continuing or would result from theconsummation of the borrowing contemplated that would constitute an Event ofDefault or a Default.

####  

#### (D)                               Noorder, judgment or decree of any court, arbitrator or Governmental Authorityshall purport to enjoin or restrain any Lender from making any Loan or anIssuing Lender from Issuing any Letter of Credit.

 

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#### (E)                                 SinceClosing Date, there shall not have occurred any event or condition that has hador could reasonably be expected to have a Material Adverse Effect.

####  

#### (F)                                 AllLoan Documents shall be in full force and effect.

####  

# SECTION 8ASSIGNMENT AND PARTICIPATION

#  

8.1                                 Assignmentsand Participations in Loans and Notes. Each Lender (including CoBank) may assign,subject to the terms of a Lender Addition Agreement, its rights and delegateits obligations under this Agreement to one or more Persons, providedthat (a) such Lender shall first obtain the written consent ofAdministrative Agent and, if no Default or Event of Default shall have occurredand be continuing, Borrower, which consents shall not be unreasonably withheldor delayed; (b) the Pro Rata Share of any of the Loan Commitments beingassigned shall in no event be less than of (i) $5,000,000 and (ii) theentire amount of the Pro Rata Share of a Loan Commitment of the assigningLender; and (c) upon the consummation of each such assignment, theassigning Lender shall pay Administrative Agent a non-refundable administrativefee of $3,500; provided, that in connection with an assignment from aLender to an Affiliate of such Lender or to another Lender, written consent ofAdministrative Agent and Borrower shall not be required and that in connectionwith an assignment from a Lender to an Affiliate of such Lender or to anotherLender, no administrative fee shall be payable, and assignments by CoBank toinstitutions chartered under the Farm Credit System shall not require consentof Borrower. From and after the effective date specified in a duly executed,delivered and accepted Lender Addition Agreement, which effective date shall beat least five Business Days after the execution thereof (unless AdministrativeAgent shall otherwise agree), (A) the assignee thereunder shall be a partyhereto and, to the extent that rights and obligations hereunder have beenassigned to it pursuant to such Lender Addition Agreement, shall have therights and obligations of the assigning Lender hereunder with respect theretoand (B) the assigning Lender shall, to the extent that rights andobligations hereunder have been assigned by it pursuant to such Lender AdditionAgreement, relinquish its rights (other than rights under the provisions ofthis Agreement and the other Loan Documents relating to indemnification orpayment of fees, costs and expenses, to the extent such rights relate to thetime prior to the effective date of such Lender Addition Agreement) and bereleased from its obligations under this Agreement other than obligations tothe extent relating to the time prior to the effective date of such LenderAddition Agreement (and, in the case of a Lender Addition Agreement coveringall or the remaining portion of such assigning Lender’s rights and obligationsunder this Agreement, such Lender shall cease to be a party hereto). The termsand provisions of each Lender Addition Agreement shall, upon the effectivenessthereof be incorporated into and made a part of this Agreement, and thecovenants, agreements and obligations of each Lender set forth therein shall bedeemed made to and for the benefit of Administrative Agent and the otherparties hereto as if set forth at length herein. Upon its receipt of a dulycompleted Lender Addition Agreement executed by an assigning Lender and anassignee, and Administrative Agent and Borrower (if required), together withany Note subject to such assignment and the processing fee referred to above(if required), Administrative Agent will accept such Lender Addition Agreementand give notice thereof to Borrower and the other Lenders. In the event of anassignment pursuant to this Subsection 8.1, Borrower shall issue a newRevolver Note(s) or Term Note(s), as applicable, to reflect the interests

 

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of the assigning Lenderand the Person to which interests are to be assigned and, upon issuance anddelivery by Borrower of such new Note or Notes, the assigning Lender shallsurrender its Revolver Note or Term Note, as applicable.

 

Each Lender (includingAdministrative Agent) may sell participations in all or any part ofits Pro Rata Share of each Loan Commitment and any Loans to one or morePersons; provided that such Lender shall first obtain the prior writtenconsent of Administrative Agent which consent shall not be unreasonablywithheld or delayed; and provided, further, that such Lender’sobligations under this Agreement shall remain unchanged; Borrower,Administrative Agent and the other Lenders shall continue to deal solely anddirectly with such Lender in connection with such Lender’s rights andobligations under this Agreement; all amounts payable by Borrower hereundershall be determined as if that Lender had not sold such participation; and theholder of any such participation shall not be entitled to require such Lenderto take or omit to take any action hereunder except action directly affecting (i) anyreduction, modification or forgiveness in the principal amount of, or rate ofinterest on or fees payable with respect to any Loan; (ii) any extensionof the Revolver Expiration Date or the Term Loan Maturity Date, or any changeof any scheduled dates fixed for any payment of any of the Obligations; (iii) anyconsent to the assignment, delegation or other transfer by Borrower of any ofits rights and obligations under any Loan Document and (iv) the release ofall or substantially all of the Collateral (except if the release of suchCollateral is permitted under and effected in accordance with, including anyconsents and approvals required under, Subsection 8.2(I) or any other LoanDocument) or any release of any material guaranty of the Obligations (except tothe extent expressly provided thereby). Borrower hereby acknowledges and agreesthat any participation will give rise to a direct obligation of Borrower to theparticipant, and the participant shall for purposes of Subsections 1.11, 1.13,1.14, 6.7 and 9.1 be considered to be a “Lender,” so long as the participantagrees for the benefit of Borrower to comply with such Subsections and Subsection 1.12as if were a “Lender.”

 

Except as otherwise provided in this Subsection 8.1,no Lender shall, as between Borrower and such Lender, be relieved of any of itsobligations hereunder as a result of any sale, assignment, transfer ornegotiation of, or granting of a participation in, all or any part of theLoans, the Notes or other Obligations owed to such Lender. Each Lender may furnishany information concerning Borrower and its Subsidiaries in the possession ofthat Lender from time to time to assignees and participants (includingprospective assignees and participants), subject to the provisions of Subsection 9.13.

 

Nothing in this Agreementshall be construed to prohibit any Lender from pledging or assigning all or anyportion of its rights and interest hereunder or under any Note as collateralsecurity for any loan or financing or in connection with any securitization orother similar transaction or to any Federal Reserve Bank as security forborrowings therefrom; provided, that no such pledge or assignment shallrelease a Lender from any of its obligations hereunder.

 

Notwithstanding anything contained in this Agreementto the contrary, (i) so long as there is no Event of Default that hascontinued in excess of four (4) months and Requisite Lenders shall remaincapable of making LIBOR Loans, no Person shall become a “Lender” hereunderunless such Person shall also be capable of making LIBOR Loans and (ii) noassignment shall be permitted hereunder which would cause any Applicable Law tobe violated (with respect to usury or otherwise).

 

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CoBank reserves the right to assign or sellparticipations in all or any part of its Pro Rata Share of the LoanCommitment on a non-patronage basis.

 

8.2                                 Agent.

 

(A)                              Appointment.Each Lender hereby irrevocably appoints and authorizes CoBank, asAdministrative Agent and as Arranger; to act as Administrative Agent orArranger  hereunder and under any otherLoan Document with such powers as are specifically delegated to AdministrativeAgent by the terms of this Agreement and any other Loan Document, together withsuch other powers as are reasonably incidental thereto. Administrative Agent isauthorized and empowered to amend, modify or waive any provisions of thisAgreement or the other Loan Documents on behalf of Lenders, subject to therequirement that the consent of certain Lenders or all Lenders, as appropriate,be obtained in certain instances as provided in Subsections 8.3 and 9.2. CoBankhereby agrees to act as Administrative Agent on the express conditionscontained in this Subsection 8.2. The provisions of this Subsection 8.2are solely for the benefit of Administrative Agent and Lenders, and Borrowershall have no rights as a third party beneficiary of any of the provisionshereof. In performing its functions and duties under this Agreement,Administrative Agent shall act solely as Administrative Agent or Arranger, asapplicable, of Lenders and Administrative Agent shall assume or be deemed tohave assumed no obligation toward or relationship of agency or trust with orfor Borrower or its respective Affiliates. Administrative Agent may executeany of its duties under this Agreement or any other Loan Document by or throughAdministrative Agent or attorneys-in-fact and shall not be responsible for thenegligence or misconduct of Administrative Agent or attorneys-in-fact that itselects with reasonable care.

 

(B)                                Natureof Duties. The duties of Administrative Agent shall be mechanical andadministrative in nature. Administrative Agent shall not have by reason of thisAgreement a fiduciary relationship in respect of any Lender. Nothing in thisAgreement or any of the Loan Documents, express or implied, is intended to orshall be construed to impose upon Administrative Agent any obligations inrespect of this Agreement or any of the Loan Documents except as expressly setforth herein or therein. Each Lender expressly acknowledges that none ofAdministrative Agent nor any of their respective officers, directors,employees, Administrative Agent, attorneys-in-fact or Affiliates have made anyrepresentation or warranty to it and that no act by Administrative Agent or anysuch Person hereafter taken, including any review of the affairs of Borrower,shall be deemed to constitute any representation or warranty by AdministrativeAgent to any Lender. Each Lender represents to Administrative Agent that (i) ithas, independently and without reliance upon Administrative Agent or any otherLender and based on such documents and information as it has deemedappropriate, made its own appraisal of and investigation into the business,prospects, operations, properties, financial and other condition andcreditworthiness of Borrower and made its own decision to enter into thisAgreement and extend credit to Borrower hereunder, and (ii) it will,independently and without reliance upon Administrative Agent or any otherLender and based on such documents and information as it shall deem appropriateat the time, continue to make its own credit analysis, appraisals and decisionsin taking or not taking action hereunder and under the other Loan Documents andto make such investigation as it deems necessary to inform itself as tothe business, prospects, operations, properties, financial and other conditionand creditworthiness of Borrower. Administrative Agent shall have no duty orresponsibility, either initially or on a continuing basis, to provide anyLender with any credit or other information with

 

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respect thereto (otherthan as expressly required herein). If Administrative Agent seeks the consentor approval of any Lenders to the taking or refraining from taking of anyaction hereunder, then Administrative Agent shall send notice thereof to eachLender. Administrative Agent shall promptly notify each Lender any time thatRequisite Lenders have instructed Administrative Agent to act or refrain fromacting pursuant hereto.

 

(C)                                Rights,Exculpation, Etc. Each of Administrative Agent, their respective Affiliatesand any of their or their Affiliates’ respective officers, directors,employees, Administrative Agent or attorneys-in-fact shall not be liable to anyLender for any action taken or omitted by them hereunder or under any of theLoan Documents, or in connection herewith or therewith, except that each suchentity shall be liable with respect to its own gross negligence, bad faith orwillful misconduct. No Agent shall be liable for any apportionment or distributionof payments made by it in good faith and if any such apportionment ordistribution is subsequently determined to have been made in error, the solerecourse of any Lender to whom payment was due but not made shall be to recoverfrom other Lenders any payment in excess of the amount to which they aredetermined to be entitled (and such other Lenders hereby agree to return tosuch Lender any such erroneous payments received by them). In performing itsfunctions and duties hereunder, Administrative Agent shall exercise the same care which it would in dealing with loansfor its own account, but Administrative Agent shall not be responsible to anyLender for any recitals, statements, representations or warranties herein orfor the execution, effectiveness, genuineness, validity, enforceability,collectibility or sufficiency of this Agreement or any of the Loan Documents orthe transactions contemplated thereby, or for the financial condition ofBorrower. Administrative Agent may at any time request instructions fromLenders with respect to any actions or approvals which by the terms of thisAgreement or of any of the Loan Documents Administrative Agent is permitted orrequired to take or to grant, and if such instructions are promptly requested,Administrative Agent shall be absolutely entitled to refrain from taking anyaction or to withhold any approval and shall not be under any liabilitywhatsoever to any Person for refraining from any action or withholding anyapproval under any of the Loan Documents (i) if such action or omissionwould, in the reasonable opinion of Administrative Agent, violate anyApplicable Law or any provision of this Agreement or any other Loan Document,or (ii) until it shall have received such instructions from RequisiteLenders or all of Lenders, as applicable. Without limiting the foregoing, noLender shall have any right of action whatsoever against Administrative Agentas a result of Administrative Agent acting or refraining from acting under thisAgreement, the Notes, or any of the other Loan Documents in accordance with theinstructions of Requisite Lenders, except in connection with its own grossnegligence, bad faith or willful misconduct.

 

(D)                               Reliance.Administrative Agent shall be entitled to rely, and shall be fully protected inrelying, upon any written or oral notices, statements, certificates, orders orother documents or any telephone message or other communication (including anywriting, telex, telecopy or telegram) believed by it in good faith to begenuine and correct and to have been signed, sent or made by the proper Person,and with respect to all matters pertaining to this Agreement or any of the LoanDocuments and its duties hereunder or thereunder, upon advice of counselselected by it in connection with the preparation, negotiation, execution,delivery, administration, amendment, modification, waiver or enforcement(whether through negotiations, legal proceedings or otherwise) of, or legaladvice in respect of rights or responsibilities under, this Agreement or any ofthe other Loan Documents.

 

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(E)                                 Indemnification.Lenders will reimburse and indemnify Administrative Agent and their respectiveAffiliates and their and their Affiliates’ officers, directors, employees,Administrative Agent, and attorneys-in-fact (collectively, “**Representatives**”), on demand (to the extentnot actually reimbursed under Subsection 9.1, but without limiting theobligations of Borrower under such Subsection 9.1) for and against any andall liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses (including, without limitation, attorneys’ fees andexpenses), advances or disbursements of any kind or nature whatsoever which may beimposed on, incurred by, or asserted against Administrative Agent or theirrespective Representatives (i) in any way relating to or arising out ofthis Agreement or any of the Loan Documents or any action taken or omitted byAdministrative Agent or its Representatives under this Agreement or any of theLoan Documents, and (ii) in connection with the preparation, negotiation,execution, delivery, administration, amendment, modification, waiver orenforcement (whether through negotiations, legal proceedings or otherwise) of,or legal advice in respect of rights or responsibilities under, this Agreementor any of the other Loan Documents in proportion to each Lender’s Pro RataShare; provided, that no Lender shall be liable for any portion of suchliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses, advances or disbursements resulting from AdministrativeAgent’s or its Representatives’ gross negligence, bad faith or willfulmisconduct. If any indemnity furnished to Administrative Agent or theirrespective Representatives for any purpose shall, in the opinion ofAdministrative Agent, be insufficient or become impaired, Administrative Agent may callfor additional indemnity and cease, or not commence, to do the acts indemnifiedagainst until such additional indemnity is furnished. The obligations ofLenders under this Subsection 8.2(E) shall survive the payment infull of the Obligations and the termination of this Agreement.

 

(F)                                 CoBank,Syndication Agent and Documentation Agent Individually. With respect to itsobligations under the Loan Commitments, the Loans made by it, and the Notesissued to it, each of CoBank, Syndication Agent, Documentation Agent shall haveand may exercise the same rights and powers hereunder and is subject tothe same obligations and liabilities as and to the extent set forth herein forany other Lender. The terms “**Lenders**”or “**Requisite Lenders**” or anysimilar terms shall, unless the context clearly otherwise indicates, includeeach of CoBank, Syndication Agent and Documentation Agent in its individualcapacity as a Lender or as one of the Requisite Lenders. Each of CoBank,Syndication Agent and Documentation Agent may lend money to, and generallyengage in any kind of banking, trust or other business with, Borrower as if itwere not acting as an Agent pursuant hereto.

 

(G)                                Noticeof Default. Administrative Agent shall be required to make any inquiryconcerning either the performance or observance of any of the terms, provisionsor conditions of this Agreement or any of the Loan Documents or the financialcondition of Borrower or any of its Subsidiaries, or the existence or possibleexistence of any Default or Event of Default. Administrative Agent shall bedeemed to have knowledge or notice of the occurrence of any Default or Event ofDefault unless Administrative Agent shall have received written notice fromBorrower or a Lender referring to this Agreement, describing such Default orEvent of Default and stating that such notice is a “notice of default.”  In the event that an Agent receives such anotice, Administrative Agent will give notice thereof to Lenders as soon asreasonably practicable; provided, that if any such notice has also beenfurnished to Lenders, Administrative Agent shall have no obligation to notify Lenderswith respect thereto. Administrative Agent shall (subject to this Subsection 8.2) take

 

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such action with respectto such Default or Event of Default as shall reasonably be directed byRequisite Lenders; provided, further, that, unless and untilAdministrative Agent shall have received such directions, Administrative Agent may (butshall not be obligated to) take such action, or refrain from taking suchaction, with respect to such Default or Event of Default as they shall deemadvisable and in the best interests of Lenders.

 

(H)                               SuccessorAgent.

 

##### (1)                                  Resignation.Administrative Agent may resign from the performance of all its agencyfunctions and duties hereunder at any time by giving at least 30 Business Days’prior written notice to Borrower and Lenders. Such resignation shall takeeffect upon the acceptance by a successor Agent of appointment pursuant toclause (2) below or as otherwise provided below.

#####  

##### (2)                                  Appointmentof Successor. Upon any such notice of resignation pursuant to clause (1) above,Requisite Lenders shall (and if no Event of Default or Default shall haveoccurred and be continuing, upon receipt of Borrower’s collective priorconsent, which shall not be unreasonably withheld), appoint a successor Agentfrom among Lenders or another financial institution. If a successor Agent shallnot have been so appointed within the 30 Business Day period referred to in Subsection 8(H)(1) above,the retiring Agent, upon notice to Borrower, shall then appoint a successorAgent from among Lenders who shall serve as Agent until such time, if any, asRequisite Lenders, upon receipt of Borrower’s collective prior written consent(if required under the first sentence of this paragraph), which shall not beunreasonably withheld, appoint a successor Agent as provided above.

#####  

##### (3)                                  SuccessorAgent. Upon the acceptance of any appointment as Agent under the LoanDocuments by a successor Agent, such successor Agent shall thereupon succeed toand become vested with all the rights, powers, privileges and duties of theretiring Agent, and the retiring Agent shall be discharged from its duties andobligations under the Loan Documents. After any retiring Agent’s resignation asAgent under the Loan Documents, the provisions of this Subsection 8.2shall inure to its benefit as to any actions taken or omitted to be taken by itwhile it was Agent under the Loan Documents.

#####  

(I)                                    CollateralMatters.

 

##### (1)                                  Releaseof Collateral. Lenders hereby irrevocably authorize Administrative Agent,at its option and in its discretion, to release any Lien granted to or held byit upon any property covered by the Security Documents (i) upontermination of the Loan Commitments and indefeasible payment and satisfactionof all Obligations (other than contingent indemnification or expensereimbursement Obligations not then due and payable); (ii) constitutingproperty being sold or disposed of in compliance with the provisions of thisAgreement if Borrower certifies to Administrative Agent in writing that thesale or disposition is made in compliance with the provisions of this Agreementand the other Loan Documents (and Administrative Agent may rely in goodfaith conclusively on any such certificate, without further inquiry); or (iii) constitutingproperty leased to Borrower under a lease which has expired or been terminatedin a transaction permitted under this Agreement or is about to expire and whichhas not been, and is not intended by Borrower to be, renewed or extended. Inaddition, Administrative Agent, with the consent of

 

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##### Requisite Lenders, may releaseor compromise any Collateral and the proceeds thereof constituting less thanall or substantially all of the Collateral.

#####  

##### (2)                                  Confirmationof Authority; Execution of Releases. Without in any manner limitingAdministrative Agent’s authority to act without any specific or furtherauthorization or consent by Lenders (as set forth in Subsection 8.2(I)(1)),each Lender agrees to confirm in writing, upon request by Administrative Agentor Borrower, the authority to release any property covered by the SecurityDocuments conferred upon Administrative Agent under clauses (i) through (iii) ofthe first sentence of Subsection 8.2(I)(1). Upon receipt by AdministrativeAgent of confirmation from each Lender of its authority to release orcompromise any particular item or types of property covered by the SecurityDocuments under Subsection 8.2(I)(1), and upon at least ten Business Days’prior written request by Borrower, Administrative Agent shall (and is herebyirrevocably authorized by Lenders to) execute such documents as may benecessary to evidence the release or compromise of the Liens granted toAdministrative Agent, for the benefit of Administrative Agent and Lenders, uponsuch Collateral, provided that (i) Administrative Agent shall notbe required to execute any such document on terms which, in AdministrativeAgent’s opinion, would expose Administrative Agent to liability or create anyobligation or entail any consequence other than the release or compromise ofsuch Liens without recourse or warranty, and (ii) such release orcompromise shall not in any manner discharge, affect or impair the Obligationsor any Liens upon (or obligations of Borrower, in respect of) all interestsretained by Borrower in the Collateral, including proceeds of any sale or otherdisposition of any Collateral, all of which shall continue to constitute part ofthe property covered by the Security Documents.

#####  

##### (3)                                  Absenceof Duty. Administrative Agent shall have no obligation whatsoever to anyLender or any other Person to assure that the property covered by the SecurityDocuments exists or is owned by Borrower, or is cared for, protected or insuredor has been encumbered or that the Liens granted to it have been properly orsufficiently or lawfully created, perfected, protected or enforced or areentitled to any particular priority, or to exercise at all or in any particularmanner or under any duty of care, disclosure or fidelity, or to continueexercising, any of the rights, authorities and powers granted or available toit in this Agreement or in any other Loan Document, it being understood andagreed that in respect of the property covered by the Security Documents or anyact, omission or event related thereto, Administrative Agent may act inany manner it may deem appropriate, in its discretion, givenAdministrative Agent’s own interest in property covered by the SecurityDocuments, as one of Lenders and as Administrative Agent, provided thatAdministrative Agent shall act in conformance with Subsection 8.2 andexercise the same care which it would in dealing with loans for its own accountand shall be liable for its and its Representatives’ gross negligence, badfaith or willful misconduct.

#####  

(J)                                   Agencyfor Perfection; Enforcement of Security by Administrative Agent. AdministrativeAgent and each Lender hereby appoint each other Lender as agent for the purposeof perfecting Administrative Agent’s security interest in assets which, inaccordance with Article 9 of the Uniform Commercial Code in anyapplicable jurisdiction, can be perfected only by possession. Should any Lender(other than Administrative Agent) obtain possession of any such Collateral,such Lender shall notify Administrative Agent thereof, and, promptly uponAdministrative Agent’s request therefor, shall deliver such Collateral toAdministrative Agent or in accordance with Administrative Agent’s instructionswithout affecting any Lender’s rights of set-off. Each Lender

 

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agrees that it will nothave any right individually to enforce or seek to enforce any Security Documentor to realize upon any collateral security for the Loans, it being understoodand agreed that such rights and remedies may be exercised only byAdministrative Agent.

 

(K)                               Disseminationof Information. Administrative Agent will use its best efforts (exceptwhere otherwise provided herein) to provide Lenders with any informationreceived by Administrative Agent from Borrower which is required to be providedto a Lender hereunder or which is otherwise requested by any Lender, providedthat Administrative Agent shall not be liable to Lenders for any failure to doso, except to the extent that such failure is attributable to AdministrativeAgent’s or its Representatives’ gross negligence, bad faith or willfulmisconduct.

 

8.3                                 Amendments,Consents and Waivers for Certain Actions.

 

#### (A)                              Exceptas otherwise provided in this Agreement (including this Subsection 8.3 andSubsection 9.2), any Lender Addition Agreement or any other Loan Document,the consent of Requisite Lenders and Borrower will be required to amend,modify, terminate, or waive any provision of this Agreement or any of the otherLoan Documents (other than any Related Interest Rate Agreement, which may onlybe amended, modified or terminated, or any provision thereof waived, inaccordance with the terms thereof and with the consent of AdministrativeAgent).

####  

#### (B)                                Inthe event Administrative Agent requests the consent of a Lender and does notreceive a written consent or denial thereof within ten Business Days after suchLender’s receipt of such request, then such Lender will be deemed to havedenied the giving of such consent.

####  

8.4                                 Disbursementof Funds. Administrative Agent shall advise each Lender by telephone ortelecopy of the amount of such Lender’s Pro Rata Share of any Loan requested byBorrower no later than 11:00 a.m. (Denver, Colorado time) at least twoBusiness Days immediately preceding the Funding Date applicable thereto (in thecase of LIBOR Loans), otherwise on the Business Day immediately preceding theFunding Date applicable thereto, and each such Lender shall pay AdministrativeAgent such Lender’s Pro Rata Share of such requested Loan, in same day funds,by wire transfer to Administrative Agent’s account by no later than 1:00 p.m.(Denver, Colorado time) on such Funding Date. If any Lender fails to pay theamount of its Pro Rata Share forthwith upon Administrative Agent’s demand,Administrative Agent shall promptly notify Borrower, and Administrative Agentshall disburse to Borrower, by wire transfer of immediately available funds,that portion of such Loan as to which Administrative Agent has received funds. Insuch event, Administrative Agent may, on behalf of any Lender not timely payingAdministrative Agent, disburse funds to Borrower for Loans requested, subjectto the provisions of Subsection 8.5(B). Each such Lender shall reimburseAdministrative Agent on demand for all funds disbursed on its behalf byAdministrative Agent. Nothing in this Subsection 8.4 or elsewhere in thisAgreement or the other Loan Documents, including the provisions of Subsection 8.5,shall be deemed to require Administrative Agent (or any other Lender) toadvance funds on behalf of any Lender or to relieve any Lender from itsobligation to fulfill its commitments hereunder or to prejudice any rights thatAdministrative Agent or Borrower may have against any Lender as a resultof any default by such Lender hereunder.

 

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8.5                                 Disbursementsof Advances; Payments.

 

(A)                              ProRata Treatment; Application. Upon receipt by Administrative Agent of eachpayment from Borrower hereunder, other than as described in the succeeding sentence,Administrative Agent shall promptly credit each Lender’s account with its ProRata Share of such payment in accordance with such Lender’s Pro Rata Share andshall promptly wire advice of the amount of such credit to each Lender. Eachpayment to Administrative Agent of its fees shall be made in like manner, butfor the account of Administrative Agent.

 

(B)                                Availabilityof Lender’s Pro Rata Share.

 

##### (1)                                  UnlessAdministrative Agent has been notified by a Lender prior to a Funding Date ofsuch Lender’s intention not to fund its Pro Rata Share of the Loan amountrequested by Borrower, and Administrative Agent has given notice pursuant toSubsection 8.4, Administrative Agent may assume that such Lender willmake such amount available to Administrative Agent on the Funding Date. If suchamount is not, in fact, made available to Administrative Agent by such Lenderwhen due, and Administrative Agent disburses funds to Borrower on behalf ofsuch Lender, Administrative Agent will be entitled to recover such amount ondemand from Borrower, without set-off, counterclaim or deduction of any kind,with interest thereon at the rate per annum then applicable to such Loan.

#####  

##### (2)                                  Nothingcontained in this Subsection 8.5(B) will be deemed to relieve aLender of its obligation to fulfill its commitments or to prejudice any rightsAdministrative Agent or Borrower may have against such Lender as a resultof a default by such Lender under this Agreement.

#####  

##### (3)                                  Withoutlimiting the generality of the foregoing, each Lender shall be obligated tofund its Pro Rata Share of any Revolving Loan made after any Event of Defaultor acceleration of the Obligations with respect to any draw on a Letter ofCredit.

#####  

(C)                                Returnof Payments.

 

##### (1)                                  IfAdministrative Agent pays an amount to a Lender under this Agreement in thebelief or expectation that a related payment has been or will be received byAdministrative Agent from Borrower and such related payment is not received byAdministrative Agent, then Administrative Agent will be entitled to recoversuch amount from such Lender without set-off, counterclaim or deduction of anykind.

#####  

##### (2)                                  IfAdministrative Agent determines at any time that any amount received byAdministrative Agent under this Agreement must be returned to Borrower or paidto any other Person pursuant to any solvency law or otherwise, then,notwithstanding any other term or condition of this Agreement, AdministrativeAgent will not be required to distribute any portion thereof to any Lender. Inaddition, eachLender will repay to Administrative Agent on demand any portion of such amountthat Administrative Agent has distributed to such Lender, together withinterest at such rate, if any, as Administrative Agent is required to pay toBorrower or such other Person, without set-off, counterclaim or deduction ofany kind.

 

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#  

# SECTION 9MISCELLANEOUS

#  

9.1                                 Indemnities.Borrower agrees to indemnify, pay, and hold Administrative Agent and eachLender and their respective Affiliates and the respective officers, directors,employees, Administrative Agent, and attorneys of Administrative Agent, Lenderand their respective Affiliates (the “**Indemnitees**”)harmless from and against any and all liabilities, obligations, losses,damages, penalties, actions, judgments, suits and claims of any kind or naturewhatsoever that may be imposed on, incurred by, or asserted against theIndemnitee as a result of Administrative Agent and each Lender being a party tothis Agreement or otherwise in connection with this Agreement, any of the otherLoan Documents or any of the transactions contemplated hereby or thereby; provided,that Borrower shall have no obligation to an Indemnitee hereunder with respectto liabilities arising from the gross negligence or willful misconduct of thatIndemnitee, in each such case as determined by a final non appealable judgmentof a court of competent jurisdiction. This Subsection 9.1 and allindemnification provisions contained within any other Loan Document shallsurvive the termination of this Agreement.

 

9.2                                 Amendmentsand Waivers. Except as otherwise provided herein, no amendment,modification, termination or waiver of any provision of this Agreement, theNotes or any of the other Loan Documents (other than any Related Interest RateAgreement, which may only be amended, modified or terminated, or anyprovision thereof waived, in accordance with the terms thereof), or consent toany departure by Borrower therefrom, shall in any event be effective unless thesame shall be in writing and signed by Borrower and Requisite Lenders (orAdministrative Agent, if expressly set forth herein, in any Note or in anyother Loan Document); provided, that, notwithstanding any otherprovision of this Agreement to the contrary and except, with respect to anassignee or assignor hereunder, to the extent permitted by any applicableLender Addition Agreement, no amendment, modification, termination or waivershall, unless in writing and signed by all Lenders, do any of the following: (i) increaseany Lender’s Pro Rata Share of any Loan Commitment or change a pro rata paymentof any Lender; (ii) reduce the principal of, rate of interest on or feespayable with respect to any Loan (other than indirectly by reason of anamendment to a defined terms); (iii) extend the Revolver Expiration Dateor the Term Loan Maturity Date or extend any other scheduled date on which anyObligation is to be paid (other than the date of any prepayment); (iv) changethe percentage of Lenders which shall be required for Lenders or any of them totake any action hereunder; (v) release or subordinate Administrative Agent’sLien on all or substantially all of the Collateral (except if the release orsubordination of such Collateral is permitted under and effected in accordancewith this Agreement or any other Loan Document) or any material guaranty of theObligations (except to the extent expressly contemplated thereby); (vi) amendor waive this Subsection 9.2 or the definitions of the terms used in thisSubsection 9.2 insofar as the definitions affect the substance of this Subsection 9.2;or (vii) consent to the assignment, delegation or other transfer byBorrower of any of its rights and obligations under any Loan Document; and provided,further, that no amendment, modification, termination or waiveraffecting the rights or duties of Administrative Agent under any Loan Documentshall in any event be effective, unless in writing and signed by AdministrativeAgent, in addition to Lenders required hereinabove to take such action. Eachamendment, modification, termination or waiver shall be effective only in thespecific instance and for the specific purpose for which it was given. Noamendment, modification, termination or waiver shall be required forAdministrative Agent to take additional Collateral pursuant to any Loan

 

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Document. No notice to ordemand on Borrower or any other Person in any case shall entitle Borrower orsuch Person to any other or further notice or demand in similar or othercircumstances. Any amendment, modification, termination, waiver or consenteffected in accordance with this Subsection 9.2 shall be binding upon eachholder of the Notes at the time outstanding, each future holder of the Notes,and, if signed by Borrower, upon Borrower.

 

9.3                                 Notices.Any required notice or other communication shall be in writing addressed to therespective party as set forth below and may be personally delivered,telecopied, sent by overnight courier service or U.S. mail and shall be deemedto have been given: (i) if delivered in person, when delivered; (ii) ifdelivered by telecopy, on the date of transmission if transmitted on a BusinessDay before 2:00 p.m. (Denver, Colorado time) and otherwise on the BusinessDay next succeeding the date of transmission; (c) if delivered byovernight courier, two Business Days after delivery to the courier properlyaddressed; or (d) if delivered by U.S. mail, four Business Days afterdeposit with postage prepaid and proper address.

 

Notices shall be addressed as follows:

 
| If to Borrower: |   | Atlantic Tele-Network, Inc.            |
|-----------------|--------|---------------------------------------------|
|            |   | 10 Derby Square                             |
|            |   | Salem, MA 01970                             |
|            |   | Attn: Michael Prior                         |
|            |   | Fax No.: 978-744-3951                       |
|            |   |                                        |
| With a copy to: |   | Edwards Angell Palmer &  Dodge LLP |
|            |   | 111 Huntington Avenue                       |
|            |   | Boston, MA 02199                            |
|            |   | Attn: Leonard Q. Slap                       |
|            |   | Fax No.: 617.227.4420                       |

 

If toa Lender or Administrative Agent:  To theaddress set forth on the signature page hereto or in the applicable LenderAddition Agreement

 

9.4                                 Failureor Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part ofAdministrative Agent or any Lender to exercise, nor any partial exercise of,any power, right or privilege hereunder or under any other Loan Documents shallimpair such power, right, or privilege or be construed to be a waiver of anyDefault or Event of Default. All rights and remedies existing hereunder or underany other Loan Document are cumulative to and not exclusive of any rights orremedies otherwise available.

 

9.5                                 Marshaling;Payments Set Aside. Neither Administrative Agent nor any Lender shall beunder any obligation to marshal any assets in payment of any or all of theObligations. To the extent that Borrower or any other Person makes payment(s)or Administrative Agent enforces its Liens or Administrative Agent or anyLender exercises its right of set-off, and such payment(s) or the proceeds ofsuch enforcement or set-off is subsequently invalidated, declared to befraudulent or preferential, set aside, or required to be repaid by anyone(whether by demand, litigation, settlement or otherwise), then to the extent ofsuch recovery, the Obligations or part thereof originally intended

 

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to be satisfied, and allLiens, rights and remedies therefor, shall be revived and continued in fullforce and effect as if such payment had not been made or such enforcement orset-off had not occurred.

 

9.6                                 Severability.The invalidity, illegality, or unenforceability in any jurisdiction of anyprovision under the Loan Documents shall not affect or impair the remainingprovisions in the Loan Documents or any such invalid, unenforceable or illegalprovision in any jurisdiction in which it is not invalid, unenforceable orillegal.

 

9.7                                 Lenders’Obligations Several; Independent Nature of Lenders’ Rights. The obligationof each Lender hereunder is several and not joint and no Lender shall beresponsible for the obligation or commitment of any other Lender hereunder. Inthe event that any Lender at any time should fail to make a Loan as hereinprovided, Lenders, or any of them, at their sole option, may make the Loanthat was to have been made by the Lender so failing to make such Loan. Nothingcontained in any Loan Document and no action taken by Administrative Agent orany Lender pursuant hereto or thereto shall be deemed to constitute Lenders tobe a partnership, an association, a joint venture or any other kind of entity.The amounts payable at any time hereunder to each Lender shall be a separateand independent debt.

 

9.8                                 Headings.Section and Subsection headings are included herein for convenienceof reference only and shall not constitute a part of this Agreement forany other purposes or be given substantive effect.

 

9.9                                 ApplicableLaw. THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED ANDENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF COLORADO, WITHOUTREGARD TO CONFLICTS OF LAW PRINCIPLES THAT REQUIRE OR PERMIT APPLICATION OF THELAWS OF ANY OTHER STATE OR JURISDICTION.

 

9.10                           Successorsand Assigns. This Agreement shall be binding upon and inure to the benefitof the parties hereto and their respective successors and permitted assigns,except that Borrower may not assign its rights or obligations hereunderwithout the written consent of all Lenders.

 

9.11                           NoFiduciary Relationship. No provision in the Loan Documents and no course ofdealing between the parties shall be deemed to create any fiduciary duty owingto Borrower or its Subsidiaries or Affiliates by Administrative Agent or anyLender.

 

9.12                           Construction.Administrative Agent, each Lender and Borrower acknowledge that each of themhas had the benefit of legal counsel of its own choice and has been afforded anopportunity to review the Loan Documents with its legal counsel and that theLoan Documents shall be constructed as if jointly drafted by AdministrativeAgent, each Lender and Borrower.

 

9.13                           Confidentiality.Administrative Agent and Lenders agree to hold any confidential informationsufficiently identified as being confidential or proprietary that they may receivefrom Borrower and its Subsidiaries pursuant to this Agreement in confidence,except for disclosure: (i) on

 

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a confidential basis todirectors, officers, employees, Administrative Agent or legal counsel,independent public accountants and other professional advisors of AdministrativeAgent or Lenders or their respective Affiliates; (ii) to regulatoryofficials having jurisdiction over Administrative Agent or Lenders or theirAffiliates; (iii) as required by Applicable Law or legal process; or (iv) inconnection with any legal proceeding between or among Administrative Agent orLenders or their Affiliates and Borrower or its Subsidiaries or Affiliates (providedthat, in the event Administrative Agent or Lenders or their Affiliates are sorequired to disclose such confidential information pursuant to clause (iii) ofthis Subsection 9.13, Administrative Agent or Lenders shall promptlynotify Borrower (unless legally prohibited from so doing), so that Borrower orany of its Subsidiaries may seek, at its sole cost and expense, a protectiveorder or other appropriate remedy); and (v) to another Person inconnection with a disposition or proposed disposition to that Person of all or part ofthat Lender’s interests hereunder or a participation interest in its Pro RataShare, provided that such disclosure is made subject to an appropriateconfidentiality agreement on terms substantially similar to this Subsection 9.13.For purposes of the foregoing, “confidential information” shall mean allinformation respecting Borrower or its Affiliates or Subsidiaries, other than (A) informationpreviously filed by Borrower or its Affiliates or Subsidiaries with anyGovernmental Authority and available to the public or otherwise made availableto third parties on a non-confidential basis, (B) information previouslypublished in any public medium from a source other than, directly orindirectly, Administrative Agent or Lenders in violation of this Subsection 9.13and (C) information obtained by Administrative Agent or Lenders from asource independent of Borrower or its Subsidiaries.

 

9.14                           Consentto Jurisdiction and Service of Process.

 

(A)  BORROWER, ADMINISTRATIVE AGENT AND LENDERSHEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITEDSTATES FEDERAL COURT OR STATE COURT IN THE STATE OF COLORADO, HAVING SUBJECTMATTER JURISDICTION OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TOANY LOAN DOCUMENTS. BORROWER, ADMINISTRATIVE AGENT AND LENDERS HEREBYIRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BEHEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOWOR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDINGBROUGHT IN ANY SUCH COURT, PERSONAL JURISDICTION OF ANY SUCH COURT OR THAT SUCHCOURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANYPARTY HERETO TO BRING PROCEEDINGS AGAINST ANY OTHER PARTY HERETO IN THE COURTSOF ANY OTHER JURISDICTION.

 

(B)  BORROWER, ADMINISTRATIVE AGENT AND LENDERSHEREBY AGREE THAT SERVICE OF THE SUMMONS AND COMPLAINT AND ALL OTHER PROCESSWHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BEEFFECTED BY MAILING BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, A COPY OFSUCH PROCESS TO BORROWER, ADMINISTRATIVE AGENT OR LENDERS AT THE ADDRESS TO WHICHNOTICES TO BORROWER, ADMINISTRATIVE AGENT AND LENDERS ARE THEN TO BE SENTPURSUANT TO SUBSECTION 9.3 AND THAT PERSONAL SERVICE OF PROCESS SHALL NOTBE REQUIRED. NOTHING HEREIN

 

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SHALL BE CONSTRUED TO PROHIBITSERVICE OF PROCESS BY ANY OTHER METHOD PERMITTED BY LAW.

 

9.15                           Waiverof Jury Trial. BORROWER, ADMINISTRATIVE AGENT AND LENDERS HEREBY WAIVETHEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASEDUPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANYDEALINGS BETWEEN OR AMONG THEM RELATING TO THE SUBJECT MATTER OF THIS LOANTRANSACTION AND ANY RELATIONSHIP THAT IS BEING ESTABLISHED AMONG ANY OF THEM. THESCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTESTHAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OFTHIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. BORROWER,ADMINISTRATIVE AGENT AND LENDERS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIALINDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIEDON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TORELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER, ADMINISTRATIVEAGENT AND LENDERS FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THISWAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVESITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER ISIRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR INWRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,SUPPLEMENTS OR MODIFICATIONS TO THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTSOR AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENTMAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. BORROWER,ADMINISTRATIVE AGENT AND LENDERS ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPONSUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ADMINISTRATIVE AGENTAND EACH LENDER.

 

9.16                           Survivalof Warranties and Certain Agreements. All agreements, representations andwarranties made herein shall survive the execution and delivery of thisAgreement, the making of the Loans, the issuance of the Letters of Credit andthe execution and delivery of the Notes. Notwithstanding anything in thisAgreement or implied by law to the contrary, the agreements of Borrower setforth in Subsections 1.4(D), 1.11, 1.14, 9.1, 9.9, 9.14 and 9.15 and theagreements of Lenders set forth in Subsection 8.2(E) (together withany other Sections and Subsections stated herein to so survive) shall survivethe payment of the Loans and the Letter of Credit Liabilities and thetermination of this Agreement.

 

9.17                           EntireAgreement. This Agreement, the Notes and the other Loan Documents referredto herein embody the final, entire agreement among the parties hereto andsupersede any and all prior commitments, agreements, representations, understandings,whether oral or written, relating to the subject matter hereof and may notbe contradicted or varied by evidence of prior, contemporaneous or subsequentoral agreements or discussions of the parties hereto.

 

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9.18                           Counterparts;Effectiveness. This Agreement and any amendments, waivers, consents orsupplements may be executed in any number of counterparts and by differentparties hereto in separate counterparts, each of which when so executed and deliveredshall be deemed an original, but all of which counterparts together shallconstitute but one and the same instrument. This Agreement shall becomeeffective upon the execution of a counterpart hereof by each of theparties hereto.

 

9.19                           Effectivenessof Amendment and Restatement; No Novation The amendment and restatement ofthe Existing Credit Agreement pursuant to this Agreement shall be effective asof the Amendment Date. All obligations and rights of Borrower, AdministrativeAgent, Issuing Lender and Lenders arising out of or relating to the periodcommencing on the Amendment Date shall be governed by the terms and provisionsof this Agreement; the obligations of and rights of Borrower, AdministrativeAgent and Lenders arising out of or relating to the period prior to theAmendment Date shall continue to be governed by the Existing Credit Agreementwithout giving effect to the amendment and restatements provided for herein.This Agreement shall not constitute a novation or termination of Borrower’s obligationsunder the Existing Credit Agreement or any document, note or agreement executedor delivered in connection therewith, but shall constitute an amendment andrestatement of the obligations and covenants of Borrower under such documents,notes and agreements, and Borrower hereby reaffirms all such obligations andcovenants, as amended and restated hereby.

 

9.20                           PatriotAct. The Lenders notify Borrower and its Subsidiaries that pursuant to therequirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed intolaw October 26, 2001)) (the “**PatriotAct**”), they are required to obtain, verify and recordinformation that identifies each of Borrower and its Subsidiaries, whichinformation includes the name and address of such entity and other informationthat will allow the Lenders to identify such in accordance with the Patriot Act.Each of Borrower and its Subsidiaries shall provide to the extent commerciallyreasonable, such information and take such other actions as are reasonablyrequested by the Lenders in order to assist the Lenders in maintaining compliance with the PatriotAct.

 

# SECTION 10DEFINITIONS

#  

10.1                           CertainDefined Terms. The terms defined below are used in this Agreement as sodefined. Terms defined in the preamble and recitals to this Agreement are usedin this Agreement as so defined.

 

“**Acquisition**” means Borrower’s acquisitionof 95% of the membership interests of Commnet, dated as of the Closing Date, ascontemplated in the Asset Purchase Agreement.

 

“**Act**” means the Securities Exchange Act of1934, as amended.

 

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“**Adjustment Date**” means each date which isthe fifth Business Day after the receipt by Administrative Agent of eachCompliance Certificate and related quarterly financial statements delivered byBorrower pursuant to Subsection 4.5(C) and, in the case a decrease inan applicable margin is warranted, a written notice from Borrower to decreasesuch margin.

 

“**Administrative Agent**” means CoBank in itscapacity as Administrative Agent for Lenders under this Agreement and each ofthe other Loan Documents and any successor in such capacity appointed pursuantto Subsection 8.2.

 

“**Affiliate**” means, (A) with respect toBorrower or any of its Subsidiaries, any Person: (i) directly or indirectlycontrolling, controlled by, or under common control with such Person; (ii) directlyor indirectly owning or holding 10% or more of any equity interest in Borroweror any Subsidiary of Borrower; or (iii) 10% or more of whose voting stockor other equity interest is directly or indirectly owned or held by Borrower orany Subsidiary of Borrower, excluding for purposes of this clause (A) Affiliateswhich are also Borrower, (B) with respect to Administrative Agent andLenders hereunder, any Person which controls or is controlled by or is undercommon control with such Person and (C) with respect to Affiliates ofAdministrative Agent, any Person which controls or is controlled by or is undercommon control with such Person. For purposes of this definition, “control”(including with correlative meanings, the terms “controlling,” “controlled by”and “under common control with”) means the possession directly or indirectly ofthe power to direct or cause the direction of the management and policies of aPerson, whether through the ownership of voting securities or by contract orotherwise.

 

“**Agreement**” means this Credit Agreement(including all schedules and exhibits hereto), as amended, modified,supplemented, extended and restated from time to time as permitted herein.

 

“**Applicable Law**”means, in respect of any Person, all provisions of constitutions, statutes,rules, regulations and orders of governmental bodies or regulatory agenciesapplicable to such Person, including the Licenses, the Communications Act andall Environmental Laws, and all orders, decisions, judgments and decrees of allcourts and arbitrators in proceedings or actions to which the Person inquestion is a party or by which it is bound.

 

“**Arranger**” means CoBank in its capacity asArranger for Lenders under this Agreement and each of the other Loan Documentsand any successor in such capacity appointed pursuant to Subsection 8.2.

 

“**Asset Disposition**” means the disposition,whether by sale, lease, transfer, loss, damage, destruction, condemnation orotherwise, by Borrower or any of its Subsidiaries of any of the following:  (i) any of the capital stock or theownership interests of Borrower or any of their Subsidiaries, or (ii) anyor all of Borrower’s or any of its Subsidiaries’ assets, other than (a) bonafide sales of inventory to customers in the ordinary course of business, (b) dispositionsof obsolete equipment not used or useful in the business of Borrower or any ofits Subsidiaries, (c) sales of Cash Equivalents for fair value and (d) thesale of Commnet’s 36.625% interest in Commnet Florida, LLC.

 

“**Available Revolver Loan Commitment**” means,at any time, the Revolver Loan Commitment, as it may have been reducedpursuant to this Agreement, minus the sum of (i)

 

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aggregate principalbalance of all Revolver Loans plus (ii) the aggregate Letter ofCredit Liability then outstanding hereunder.

 

“**Bankruptcy Code**” means Title 11 of theUnited States Code entitled “Bankruptcy,” as amended from time to time, or anyapplicable bankruptcy, insolvency or other similar federal or state law now orhereafter in effect and all rules and regulations promulgated thereunder.

 

“**Base Rate**” means, a variable rate ofinterest per annum equal, on any day, to the rate of interest published on suchday in the Eastern Edition of *The Wall Street Journal*as the average prime lending rate for 75 percent of the United States’ 30largest commercial banks, or if the Eastern Edition of *The WallStreet Journal* or such rate is not published on such day, such rateas last published in the Eastern Edition of *The Wall Street Journal*.In the event the Eastern Edition of *The Wall Street Journal*ceases to publish such rate or an equivalent, the term “Prime Rate” shall bedetermined by reference to such other regularly published prime rate based uponany averaging of such 30 banks, as Administrative Agent shall determine, or ifno such published average prime rate is available, then the term “Prime Rate”shall mean a variable rate of interest per annum as determined byAdministrative Agent equal to the highest of the “prime rate,” “reference rate,”“base rate” or other similar rate announced from time to time by any of BankersTrust Company and Citibank as selected by Administrative Agent (with theunderstanding that any such rate may merely be a reference rate and may notnecessarily represent the lowest or best rate actually charged to any customerby such bank). Any change in the “Prime Rate” shall be automatic, without thenecessity of notice being provided to Borrower or any other party.

 

“**Base Rate Margin**” means the applicablepercent per annum determined in accordance with Subsection 1.2(B).

 

“**BDC**”means Bermuda Digital Communications, LTD., a Bermuda entity.

 

“**Borrower Pledged Cash**” means deposits inthe name of Borrower (and not of its Subsidiaries) of the Borrower’s fundslocated in commercial banks in the United States and in deposit accounts ofwhich the Administrative Agent has “control” (as defined in Article 9 ofthe Uniform Commercial Code in effect in the State of Colorado, as amendedfrom time to time).

 

“**Business Day**” means (i) for allpurposes other than as covered by clause (ii) below, any day excludingSaturday, Sunday and any day which is a legal holiday under the laws of theStates of Colorado, Georgia or Massachusetts or is a day on which bankinginstitutions located in such jurisdictions are closed or which the FederalReserve Banks are closed, and (ii) with respect to all notices,determinations, fundings and payments in connection with LIBOR Loans, any daythat is a Business Day described in clause (i) above and that is also aday for trading by and between banks in U.S. dollar deposits in the applicableinterbank LIBOR market.

 

“**Calculation Period**” means each periodcommencing on each Adjustment Date and ending on the day preceding eachsubsequent Adjustment Date.

 

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“**Capital Lease**” means any lease of real orpersonal property which is required to be capitalized under GAAP or which istreated as an operating lease under regulations applicable to Borrower and itsSubsidiaries but which otherwise would be required to be capitalized underGAAP.

 

“**Cash Equivalents**” means:  (i) marketable direct obligations issuedor unconditionally guarantied by the United States Government or issued by anyagency thereof and backed by the full faith and credit of the United States ofif not so backed, then having a rating of at least A+ from Standard &Poor’s Rating Service and at least A1 from Moody’s Investors Service, Inc.,in each case maturing within two years from the date of acquisition thereof; (ii) commercialpaper maturing no more than one  yearfrom the date issued and, at the time of acquisition, having a rating of atleast A-1 from Standard & Poor’s Rating Service or at least P-1 fromMoody’s Investors Service, Inc.; (iii) certificates of deposit orbankers’ acceptances maturing within one year from the date of issuance thereofissued by, or overnight reverse repurchase agreements from, any commercial bankorganized under the laws of the United States of America or any state thereofor the District of Columbia having combined capital and surplus of not lessthan $500,000,000; (iv) time deposits maturing no more than 30 days from thedate of creation thereof with commercial banks having membership in the FederalDeposit Insurance Corporation in amounts at any one such institution notexceeding the lesser of $100,000 or the maximum amount of insurance applicableto the aggregate amount of Borrower’s deposits at such institution; and (v) Investmentsin CoBank, ACB or other Investments satisfactory to Administrative Agent.

 

“**Change of Control**” means: (i) a reporton Schedule 13D shall be filed with the Securities and Exchange Commissionpursuant to Section 13(d) of the Act disclosing that any person otherthan Borrower or any employee benefit plan sponsored by Borrower, is thebeneficial owner (as the term is defined in Rule 13d-3 under the Act)directly or indirectly, of 30% or more of the total voting power represented byBorrower’s then outstanding voting securities (calculated as provided inparagraph (d) of Rule 13d-3 under the Act in the case of rights toacquire voting securities); or (ii) any person, other than Borrower or anyemployee benefit plan sponsored by Borrower, shall purchase shares pursuant toa tender offer or exchange offer to acquire any voting securities of Borrower(or securities convertible into such voting securities) for cash, securities orany other consideration, provided that after consummation of the offer, theperson in question is the beneficial owner directly or indirectly, of thirtypercent or more of the total voting power represented by Borrower’s thenoutstanding voting securities (all as calculated under clause (i)); or (iii) theoccurrence of (A) any consolidation or merger of Borrower in whichBorrower is not the continuing or surviving corporation (other than a merger ofBorrower in which holders of common shares of Borrower immediately prior to themerger have the same proportionate ownership of common shares of the survivingcorporation immediately after the merger as immediately before or a mergereffected pursuant to Section 251(g) of the Delaware GeneralCorporation Law), or pursuant to which common Shares of Borrower will beconverted into cash, securities or other property, or (B) any sale, leaseexchange or other transfer (in one transaction or a series of relatedtransactions) of all or substantially all the assets of Borrower; or (iv) thereshall have been a change in the composition of the Board of Directors ofBorrower at any time during any consecutive twenty-four month period such that “continuingdirectors” cease for any reason to constitute at least a 70% majority of theBoard. For purposes of this clause, “continuing directors” means those membersof the Board who either were directors at the beginning of such consecutivetwenty-four month period or were elected by or on the nomination orrecommendation of at least a 70% majority of the then-existing

 

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“continuing directors.”  Notwithstanding the foregoing, no “Change ofControl” shall have occurred or be deemed to be continuing, during such time as Cornelius B. Prior, Jr., hisspouse or his lineal descendents, directly or in trust for their benefit, shallhave voting control of (a) 50% or more of the outstanding shares entitledto vote, or (b) 35% or more of the outstanding shares entitled to vote ata time when no other shareholders described above owns in the aggregate 35% ormore of the outstanding shares entitled to vote.

 

“**Closing Date**” means September 15,2005.

 

“**Collateral**” means, collectively:  (i) all “Collateral” as defined in theSecurity Documents; (ii) all real property and interests in real propertymortgaged pursuant to the Security Documents; and (iii) any property orinterest provided in addition to or in substitution for any of the foregoing.

 

“**Collateral ContractAssignments**” means, collectively, all collateral assignments ofMaterial Contracts, in form and content approved by Administrative Agent,executed by Borrower or any of its Subsidiaries in favor of AdministrativeAgent, for the benefit of itself and Lenders, as required pursuant to Subsection 2.8,as amended, modified, supplemented, extended and restated from time to time.

 

 “**Commnet Leverage Ratio**” means, as of thedate of calculation derived by dividing (a) the result of (i) Indebtednessof Borrower (calculated on a consolidated basis for Borrower and its Subsidiaries)minus (ii) the amount of Borrowers Pledged Cash, each as of thedate of calculation  by (b) EBITDAfor Commnet (calculated on a consolidated basis for Commnet and itsSubsidiaries) for the then most recently completed four fiscal quarters.

 

“**Commnet OperatingAgreement**” means the Third Amended and Restated Operating Agreementof Commnet, dated as of the Closing Date, as it may be amended, modified,supplemented, extended and restated from time to time.

 

“**Communications Act**” means theCommunications Act of 1934, as amended and any similar or successor federalstatute, and the rules and regulations of the FCC thereunder, all as thesame may be in effect from time to time.

 

“**Communications System**” means a system orbusiness providing voice, data or video transport, connection or monitoringservices, through any means or medium, and the provision of management,technical and financial (including call rating) or other services to companiesproviding such transport, connection or monitoring services.

 

“**Contingent Obligation**,” as applied to anyPerson, means any direct or indirect liability of that Person:  (i) with respect to any indebtedness,lease, dividend or other obligation of another Person if the primary purpose orintent of the Person incurring such liability, or the primary effect thereof,is to provide assurance to the obligee of such liability that such liabilitywill be paid, performed or discharged, or that the holders of such liabilitywill be protected (in whole or in part) against loss with respect thereto; (ii) withrespect to any letter of credit issued for the account of that Person or as towhich that Person is otherwise liable for reimbursement of drawings; or (iii) underany foreign exchange contract, currency swap agreement, interest rate swapagreement or other

 

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similar agreement orarrangement designed to alter the risks of that Person arising fromfluctuations in currency values or interest rates. Contingent Obligations shallalso include (a) the direct or indirect guaranty, endorsement (other thanfor collection or deposit in the ordinary course of business), co-making,discounting with recourse or sale with recourse by such Person of theobligation of another, (b) the obligation to make take-or-pay or similarpayments if required regardless of nonperformance by any other party or partiesto an agreement, and (c) any liability of such Person for the obligationsof another through any agreement to purchase, repurchase or otherwise acquiresuch obligation or any property constituting security therefor, to providefunds for the payment or discharge of such obligation or to maintain thesolvency, financial condition or any balance sheet item or level of income ofanother. The amount of any Contingent Obligation shall be equal to the amountof the obligation so guaranteed or otherwise supported or, if not a fixed anddetermined amount, the maximum amount so guaranteed.

 

“**Debt Service**” means, for the applicableperiod, the sum of:  (a) all principalpayments scheduled to be made on Indebtedness (or scheduled reductions incommitments on lines of credit to the extent such reductions would cause therepayment of principal amounts then outstanding under such lines), excludingreimbursement of draws on Letters of Credit, plus (b) InterestExpense.

 

“**Debt Service Coverage Ratio**” means, as ofthe date of calculation, the ratio derived by dividing (a) EBITDA by(b) Debt Service, each for the then most recently completed four fiscalquarters.

 

“**Default**” means a condition or event that,after notice or lapse of time or both, would constitute an Event of Default ifthat condition or event were not cured or removed within any applicable graceor cure period.

 

“**EBITDA**” means (i) the result of (1) sum of (a) net income or deficit, as the case may be,excluding gains or losses on the sale of assets and extraordinary(non-recurring, one-time) gains and losses, (b) total interest expense(including non-cash interest), (c) depreciation and amortization expense,and (d) income taxes, minus (2) to the extent included incalculating net income or deficit, the sum of (a) interest income, (b) dividendsand patronage income and (c) equity in earnings from unconsolidatedsubsidiaries and joint ventures, and (ii) will be measured for the thenmost recently completed four fiscal quarters, adjusted to give effect to anyacquisition, sale or other disposition, directly or through a subsidiary, ofany business (or any portion thereof) during the period of calculation as if suchacquisition, sale or other disposition occurred on the first day of such periodof calculation.

 

“**Environmental Laws**” means all applicablefederal, state or local laws, statutes, rules, regulations or ordinances,codes, common law, consent agreements, orders, decrees, judgments orinjunctions issued, promulgated, approved or entered thereunder relating topublic health, safety or the pollution or protection of the environment,including those relating to releases, discharges, emissions, spills, leaching, ordisposals of hazardous substances (including petroleum, crude oil or anyfraction or derivative thereof, or other hydrocarbons) to air, water, land orground water, to the withdrawal or use of ground water, to the use, handling ordisposal of polychlorinated biphenyls, asbestos or urea formaldehyde, to thetreatment, storage, disposal or management of hazardous substances (includingpetroleum, crude oil or any fraction or derivative thereof, or other

 

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hydrocarbons), pollutantsor contaminants, to exposure to toxic, hazardous or other controlled,prohibited, or regulated substances, including, without limitation, any suchprovisions under the Comprehensive Environmental Response, Compensation andLiability Act of 1980, as amended (42 U.S.C. § 9601 etseq.),and the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. § 6901etseq.).

 

“**Equity**” means the result of consolidatedtotal assets minus consolidated total liabilities.

 

“**Equity to Assets Ratio**” means the ratioderived by dividing (i) Equity by (ii) consolidatedtotal assets.

 

“**ERISA**” means the Employee Retirement IncomeSecurity Act of 1974, as amended from time to time.

 

“**ERISA Affiliate**” means any trade orbusiness (whether or not incorporated) which is a member of a controlled groupor under common control with Borrower within the meaning of Section 414(b) or(c) of the IRC (and Sections 414(m) and (o) of the IRC for purposes ofprovisions relating to Section 412 of the IRC).

 

“**ERISA Event**” means, with respect toBorrower, any ERISA Affiliate or any Pension Plan, the occurrence of any of thefollowing: (a) a Reportable Event; (b) a withdrawal by a substantialemployer (as defined in Section 4001(a)(12) of ERISA) subject to Section 4063of ERISA; (c) a cessation of operations which is treated as a withdrawalunder Section 4062(e) of ERISA; (d) a complete or partialwithdrawal under Section 4203 or 4205 of ERISA from a Multi-employer Plan;(e) a notification that a Multi-employer Plan is in reorganization under Section 4242of ERISA; (f) the filing of a notice of intent to terminate a Pension Planunder 4041 of ERISA; (g) the treatment of an amendment of a Pension Planas a termination under 4041 of ERISA; (h) the termination of a Multi-employerPlan under Section 4041A of ERISA; (i) the commencement ofproceedings by the PBGC to terminate a Pension Plan under 4042 of ERISA; (j) anevent or condition which could reasonably be expected to constitute groundsunder Section 4042 of ERISA for the termination of, or the appointment ofa trustee to administer, a Pension Plan; or (k) the imposition of any liabilityunder Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007of ERISA.

 

“**Facility**” or “**Facilities**” means one or more of the Revolver Facility and theTerm Loan Facility.

 

“**FCC**” means the Federal CommunicationsCommission, or any other similar or successor agency of the federal governmentadministering the Communications Act.

 

“**Franchise**” means any franchise or otherauthorization, ordinance or regulation permitting the operation of aCommunications System granted by any federal, state  or local Governmental Authority (including inGuyana).

 

“**GAAP**” means generally accepted accountingprinciples as set forth in statements from Auditing Standards No. 69 asamended, entitled “The Meaning of ‘Present Fairly in Conformance

 

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with Generally AcceptedAccounting Principles in the Independent Auditors Reports’” issued by theAuditing Standards Board of the American Institute of Certified PublicAccountants and statements and pronouncements of the Financial AccountingStandards Board that are applicable to the circumstances as of the date ofdetermination.

 

 “**GovernmentalApprovals**” means all authorizations, consents, approvals, licensesand exemptions of, registrations and filings with, and reports to, allGovernmental Authorities, including all Licenses.

 

“**Governmental Authority**” means any nation(including Guyana), province, or state or any political subdivision of any ofthe foregoing, and any government or any Person exercising executive,legislative, regulatory or administrative functions of or pertaining togovernment, and any corporation or other entity exercising such functions ownedor controlled, through stock or capital ownership or otherwise, by any of theforegoing, including the FCC and any PUC.

 

“**Guaranty**”means a Continuing Guaranty, in form and content approved byAdministrative Agent, made a Subsidiary of Borrower in favor of AdministrativeAgent, for the benefit of itself and the Lenders, as amended, modified,supplemented, extended or restated from time to time.

 

“**Indebtedness**” as applied to any Person,means without duplication: (i) all indebtedness for borrowed money; (ii) thatportion of obligations with respect to Capital Leases or other capitalizedagreements that is properly classified as a liability on a balance sheet inconformity with GAAP; (iii) notes payable and drafts accepted representingextensions of credit whether or not representing obligations for borrowedmoney; (iv) any obligation owed for all or any part of the deferredpurchase price of property or services, except trade payables arising in theordinary course of business and outstanding not more than 90 days after suchobligation is due (unless thereafter contested in good faith); (v) allobligations created or arising under any conditional sale or other titleretention agreement; (vi) all indebtedness secured by any Lien on any propertyor asset owned or held by that Person regardless of whether the indebtednesssecured thereby shall have been assumed by that Person or is nonrecourse to thecredit of that Person, but only to the extent of the fair value of suchproperty or asset; (vii) all obligations of such Person under take-or-payor similar arrangements or under commodities agreements; (viii) the nettermination obligations of such Person under any Interest Rate Agreement,calculated as of any date as if such agreement or arrangement were terminatedas of such date; (ix) the maximum amount of all standby letters of creditissued or bankers’ acceptance facilities created for the account of such Personand, without duplication, all drafts drawn thereunder (to the extentunreimbursed); (x) the principal balance outstanding under any syntheticlease, tax retention operating lease, off-balance sheet loan or similaroff-balance sheet financing product; (xi) with respect to the Indebtednessof any partnership or unincorporated joint venture in which such Person is ageneral partner or joint venturer, the least of (A) such Indebtedness, (B) suchPerson’s actual liability for such Indebtedness or (C) such Person’sinvestment in such partnership or joint venture; (xii) obligations with respectto principal under Contingent Obligations for the repayment of money or thedeferred purchase price of property, whether or not then due and payable(calculated as the maximum amount of such principal); ); (xiii) obligationswith respect to stated amounts of Letters of Credit; and (xiv) obligationsunder partnership, organizational or other agreements to fund capitalcontributions or other equity calls

 

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with respect to anyPerson or investment, or to redeem, repurchase or otherwise make payments inrespect to capital stock or other securities of such Person.

 

“**Interest Expense**” shall mean, for theapplicable period, the aggregate amount of accrued interest on Indebtedness,and net amounts payable under Interest Rate Agreements, whether paid in cash oraccrued as a liability.

 

“**Interest Period**” shall mean any of LIBORInterest Period or any Quoted Rate Interest Period.

 

“**Interest Rate Agreement**” means any interestrate swap, hedge, cap, collar or similar agreement or arrangement designed toprotect Borrower against fluctuations in interest rates and will also includeany arrangement that Lenders, in their sole discretion, may offer toBorrower to fix the interest rate applicable to any portions of the Loans.

 

“**Investment**” means (i) any direct orindirect purchase or other acquisition by Borrower or any of its Subsidiariesof any beneficial interest in, including stock, partnership interest or otherequity securities of, any other Person; and (ii) any direct or indirectloan, advance, transfer, guarantee, assumption of liability or other obligationor liability, or capital contribution by Borrower or any of its Subsidiaries toany other Person, including all indebtedness and accounts receivable from thatother Person that are not current assets or did not arise from sales to thatother Person in the ordinary course of business. The amount of any Investmentshall be the original cost of such Investment plus the cost of alladditions thereto, without any adjustments for increases or decreases in value,or write-ups, write-downs or write-offs with respect to such Investment.

 

“**IRC**” means the Internal Revenue Code of1986, as amended from time to time, and all rules and regulationspromulgated thereunder.

 

**“IssuingLender”** means each Person so designated in the introductoryparagraph of this Agreement, or any other Lender designated from time to timeby Administrative Agent with the approval of the Borrower, in such Lender’scapacity as an issuer of Letters of Credit hereunder.

 

“**Lender**” or “**Lenders**” means one or more of the banks or other financialinstitutions identified as Lenders in the first paragraph of this Agreement andtheir successors and permitted assigns pursuant to Subsection 8.1.

 

“**Lender Addition Agreement**” means anagreement among Administrative Agent, a Lender and such Lender’s assigneeregarding their respective rights and obligations with respect to assignmentsof the Loans, the Loan Commitment and other interests under this Agreement andthe other Loan Documents in the form attached hereto as Exhibit 10.1(A).

 

**“Letterof Credit Liability”** means, as to each Letter of Credit, allreimbursement obligations of Borrower to the issuer of the Letter of Creditconsisting of (a) the amount available to be drawn or which may becomeavailable to be drawn; (b) all amounts which have been paid and madeavailable by the Issuing Lender to the extent not reimbursed by Borrower,whether by the making of a Revolver Loan or otherwise; and (c) all accruedand unpaid interest, fees and

 

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expenses with respectthereto. In the case of any Letter of Credit that is issued in a currency otherthan United Stated Dollars, the corresponding Letter of Credit Liability shallbe determined in United States Dollars based on the currency exchange rate fromtime to time applicable to the issuer of such Letter of Credit.

 

“**LIBOR**” means for each applicable InterestPeriod, a fixed annual rate equal to: (a) the rate of interest determinedby Administrative Agent at which deposits in U.S. dollars for the relevantInterest Period are offered based on information presented by the TelerateService as quoted by the British Bankers Association as of 11:00 a.m.(London time) on the day which is two Business Days prior to the first day ofsuch Interest Period, provided, that in the event British BankersAssociation ceases to provide such quotations (as determined by AdministrativeAgent), then Administrative Agent will notify Borrower and Administrative Agentand Borrower will agree upon a substitute basis for obtaining such quotations, dividedby (b) a number equal to 1.0 minus the aggregate (but withoutduplication) of the rates (expressed as a decimal fraction) of reserverequirements in effect on the day which is two Business Days prior to thebeginning of such Interest Period for Eurocurrency funding (currently referredto as “Eurocurrency Liabilities” in Regulation D of such Board) which arerequired to be maintained by a member bank of the Federal Reserve System(including, without limitation, basic, supplemental, marginal and emergencyreserves under any regulations of the Board of Governors of the Federal ReserveSystem or other Governmental Authority having jurisdiction with respectthereto, as now and from time to time in effect); such rate to be roundedupward to the next whole multiple of 0.01 percent.

 

“**LIBOR Loans**” means Loans (or portionsthereof as permitted hereunder) accruing interest at rates determined byreference to the LIBOR.

 

“**LIBOR Margin**” means the applicable percentper annum determined in accordance with Subsection 1.2(B).

 

“**Licenses**” means any materialtelecommunications or similar license, authorization, waiver, certificate ofcompliance, franchise, approval or permit, whether for the acquisition,construction or operation of any Telecommunications System, granted or issuedby the FCC or any applicable PUC and held or utilized by Borrower or anySubsidiary of Borrower, all of which are listed as of the Closing Date on Schedule 5.13(A).

 

“**Lien**” means any lien, mortgage, pledge,security interest, charge or encumbrance of any kind, whether voluntary orinvoluntary (including any conditional sale or other title retention agreementand any lease in the nature thereof), and any agreement to give any lien,mortgage, pledge, security interest, charge or encumbrance.

 

“**Loan**” or “**Loans**”means an advance or advances under any of the Loan Commitments.

 

“**Loan Commitment**” or “**Loan Commitments**” means one or more of theRevolver Loan Commitment and the Term Loan Commitment, as any such commitmentis reduced from time to time as provided in this Agreement.

 

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“**Loan Documents**” means, collectively, thisAgreement, the Revolver Notes, the Term Loan Notes, the Security Documents, anyGuaranty, any Related Interest Rate Agreement to which a Lender or an Affiliateof a Lender is a party and all other instruments, documents and agreementsexecuted and delivered concurrently herewith or at any time hereafter to or forthe benefit of Administrative Agent or any other Agent or Lender in connectionwith the Loans and other transactions contemplated by this Agreement, all asamended, modified, supplemented, extended or restated from time to time.

 

“**Material Adverse Effect**” means (i) amaterial adverse effect upon the business, operations, properties, assets orcondition (financial or otherwise) or prospects of Borrower and itsSubsidiaries, taken as a whole, or (ii) the impairment of any Liens infavor of Administrative Agent, of the ability of Borrower and its Subsidiaries,taken as a whole, to perform their obligations under the Loan Documents orof Administrative Agent or any Lender to enforce any Loan Document or collectany of the Obligations. In determining whether any individual event couldreasonably be expected to have a Material Adverse Effect, notwithstanding thatsuch event does not of itself have such effect, a Material Adverse Effect shallbe deemed to have occurred if the cumulative effect of such event and all otherthen existing events could reasonably be expected to have a Material AdverseEffect.

 

“**Material Contracts**” means (a) theMaterial Contracts listed on Schedule 5.17, (b) any contractor any other agreement, written or oral, of Borrower or any of its Subsidiariesinvolving monetary liability of or to any such Person in an aggregate amount inexcess of $1,000,000****per annum and(c) any other contract or agreement, written or oral, of Borrower or anyof its Subsidiaries the failure to comply with which could reasonably beexpected to have a Material Adverse Effect.

 

“**Multi-employer Plan**” means a Multi-employerplan as defined in Section 4001(a)(3) of ERISA to which Borrower orany ERISA Affiliate makes, is making, made, or was at any time during thecurrent year or the immediately preceding six (6) years obligated to makecontributions.

 

“**Net Proceeds**” means cash proceeds receivedby Borrower or any Subsidiary of Borrower from any Asset Disposition, debt orequity issuance (including insurance proceeds, awards of condemnation, andpayments under notes or other debt securities received in connection with anyAsset Disposition), net of (i) the reasonable costs of such sale, lease,transfer, issuance or other disposition (including taxes attributable to suchsale, lease, transfer or issuance) and (ii) amounts applied to repaymentof permitted Indebtedness (other than the Obligations) secured by a Lien on theasset or property disposed and (iii) for Subsidiaries not wholly owned byBorrower, the percentage equal to the ownership interests of Persons other thanBorrower (by way of example, if Borrower owns a Subsidiary 95%, who in turnowns another Subsidiary 80%, and an Asset Disposition occurs at the otherSubsidiary, only 76% (95% of 80%) of the proceeds thereof that would otherwisehave constituted Net Proceeds will constitute Net Proceeds.

 

“**Note**” or “**Notes**”means one or more of the Revolver Notes and the Term Notes.

 

“**Obligations**” means all obligations,liabilities and indebtedness of every nature of Borrower from time to time owedto Administrative Agent or any Lender (or any Affiliate of a Lender party to aRelated Interest Rate Agreement) under the Loan Documents, including theprincipal amount of all debts, claims and indebtedness, accrued and unpaidinterest and all fees, costs and expenses, whether

 

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primary, secondary,direct, contingent, fixed or otherwise, heretofore, now or from time to timehereafter owing, due or payable, or any combination thereof, whether before orafter the filing of a proceeding under the Bankruptcy Code by or againstBorrower.

 

“**PBGC**”means the Pension Benefit Guaranty Corporation or any Person succeeding to thefunctions thereof.

 

“**Pension Plan**” means a pension plan (asdefined in Section 3(2) of ERISA) subject to Title IV of ERISA whichBorrower or an ERISA Affiliate sponsors, maintains, or to which it makes, ismaking, or is obligated to make contributions or, in the case of aMulti-employer Plan, has made contributions at any time during the current yearor the immediately preceding six plan years.

 

“**Permitted Encumbrances**” means thefollowing:

 

(1)                                  Liensfor taxes, assessments or other governmental charges not yet due and payable orLiens for taxes, assessments or other governmental charges due and payable ifthe same are being diligently contested in good faith and by appropriateproceedings and then only if and to the extent that adequate reserves thereforare maintained on the books of Borrower and its Subsidiaries, as applicable, inaccordance with GAAP;

 

(2)                                  statutoryLiens of landlords, carriers, warehousemen, mechanics, materialmen and othersimilar liens imposed by law, which are incurred in the ordinary course ofbusiness for sums not more than 60 days delinquent or which are beingdiligently contested in good faith; provided that a reserve or otherappropriate provision shall have been made therefor and in any event theaggregate amount of liabilities secured by such Liens is less than $100,000;

 

(3)                                  Liens incurred ordeposits made in the ordinary course of business in connection with workers’compensation, unemployment insurance and other types of social security (otherthan any Lien imposed by the Employee Retirement Income Security Act of 1974 orany rule or regulation promulgated thereunder), or to secure theperformance of tenders, statutory obligations, surety, stay, customs and appealbonds, bids, leases, government contracts, trade contracts, performance andreturn of money bonds and other similar obligations (exclusive of obligationsfor the payment of borrowed money) in the amount and to the extent permitted bySubsection 3.4;

 

(4)                                  deposits, in anaggregate amount not to exceed $100,000, made in the ordinary course ofbusiness to secure liability to insurance carriers;

 

(5)                                  anyattachment or judgment Lien which, individually or when aggregated, does notconstitute an Event of Default under Subsection 6.1(I) (whetherindividually or when aggregated with other such Liens);

 

(6)                                  easements,rights of way, restrictions and other similar charges or encumbrances notinterfering in any material respect with the ordinary conduct of the businessof Borrower or any of its Subsidiaries or materially adversely affecting thevalue of any Collateral;

 

(7)                                  Liensin favor of Administrative Agent, for the benefit of itself and Lenders;

 

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(8)                                  Liensin favor of CoBank as set forth in Subsection 2.6;

 

(9)                                  Lienssecuring purchase money security agreements and Capital Leases permitted underSubsection 3.1(C), provided that such Liens do not encumber anyproperty other than the items purchased with the proceeds of such Indebtednessor leased pursuant to such Indebtedness (and the proceeds of such property) andsuch liens do not secure any amounts other than amounts necessary to purchaseor lease such items; and

 

(10)                            Lienin favor of US Bancorp Equipment Finance, Inc. securing the AirplaneIndebtedness, provided that such Lien does not encumber any propertyother than the airplane purchased with such Indebtedness.

 

“**Person**” means and includes natural persons,corporations, limited liability companies, limited partnerships, limitedliability partnerships, general partnerships, joint stock companies, jointventures, associations, companies, trusts, banks, trust companies, land trusts,business trusts or other organizations, whether or not legal entities, andgovernments and agencies and political subdivisions thereof and theirrespective permitted successors and assigns (or in the case of a governmentalperson, the successor functional equivalent of such Person).

 

“**Plan**” means an employee benefit plan (asdefined in Section 3(3) of ERISA) which Borrower or an ERISAAffiliate sponsors or maintains or to which Borrower or an ERISA Affiliatemakes, is making, or is obligated to make contributions and includes anyPension Plan.

 

“**Pro Rata Share**” means, the percentageobtained by dividing (i) such Lender’s commitment to make Loans under theLoan Commitment, as set forth on the signature page of this Agreementopposite such Lender’s signature or in the most recent Lender AdditionAgreement, if any, executed by such Lender, by (ii) the sum of all suchcommitments of all Lenders to make Loans under the Loan Commitment.

 

“**PUC**” means any state, provincial or otherlocal regulatory agency or body, including the Guyanan Public UtilitiesCommission, that exercises jurisdiction over the rates or services or theownership, construction or operation of any Telecommunications System or overPersons who own, construct or operate a Telecommunications System, in each caseby reason of the nature or type of the business subject to regulation and notpursuant to laws and regulations of general applicability to Persons conductingbusiness in any such jurisdiction.

 

“**Purchase Agreement**” means that MergerAgreement by and among Borrower, Commnet and certain other Persons, dated as ofJuly 26, 2005, pursuant to which Borrower agrees to purchase substantiallyall of the assets of Commnet.

 

“**Quoted Rate Loan**” means Loans accruinginterest at Quoted Rate.

 

“**Related Interest Rate Agreement**” means anyInterest Rate Agreement, in form and content acceptable to AdministrativeAgent, entered into by Borrower to hedge the interest rate exposure applicableto any portions of the Loans.

 

“**Reportable Event**” means any of the eventsset forth in Section 4043(b) of ERISA or the

 

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regulationsthereunder, other than any such event for which the 30 day notice requirementunder ERISA has been waived in regulations issued by the PBGC.

 

“**Requisite Lenders**” means at least twoLenders (to the extent more than one Lender holds any Loan Commitment) who havein the aggregate Pro Rata Shares greater than 50%.

 

“**Restricted Junior Payment**” means:  (i) any dividend or other distribution,direct or indirect, on account of any equity interest in Borrower or any of itsSubsidiaries, including any ownership interest and any shares of any class ofstock or other equity interest of Borrower or any of its Subsidiaries now orhereafter outstanding, except a dividend payable solely in shares of a class ofstock or other equity interest to the holders of that class; (ii) anyredemption, repurchase, conversion, exchange, retirement, sinking fund orsimilar payment, purchase or other acquisition for value, direct or indirect,of any equity interest in Borrower or any of its Subsidiaries, including anyownership interest and any shares of any class of stock of Borrower or anyof its Subsidiaries now or hereafter outstanding; (iii) any payment orprepayment of interest on, principal of, premium, if any, redemption,conversion, exchange, purchase, retirement, defeasance, sinking fund or similarpayment with respect to, any Indebtedness subject to subordination provisionsfor the benefit of Administrative Agent and Lenders; and (iv) any paymentmade to retire, or to obtain the surrender of, any outstanding warrants,options or other rights to acquire any equity interest in Borrower or any ofits Subsidiaries, including any ownership interest and shares of any class ofstock of Borrower or any of its Subsidiaries now or hereafter outstanding.

 

“**Revolver Expiration Date**” means the earlierof (i) the acceleration of the Obligations pursuant to Subsection 6.3or (ii) October 31, 2010.

 

“**Revolver Facility**” means the revolver loanfacility extended to Borrower pursuant to Subsection 1.1(A).

 

“**Revolver Loan Commitment**” means, initially$20,000,000, as such amount is reduced from time to time as provided in thisAgreement.

 

“**Revolver Loans**” means an advance oradvances under the Revolver Loan Commitment.

 

“**Revolver Note**” or “**Revolver Notes**” means one or more of theNotes of Borrower substantially in the form of Exhibit 10.1(B),or any combination thereof, and any replacements, reinstatements, renewals orextension of any such notes, in whole or in part.

 

“**Security Agreement**” means a Pledge andSecurity Agreement, in form and content approved by Administrative Agent,executed by Borrower or any of its Subsidiaries, in favor of AdministrativeAgent, for the benefit of itself and Lenders, encumbering personal property ofBorrower or such Subsidiary, wherever situated, as it may be amended,modified, supplemented, extended or restated from time to time.

 

“**Security Documents**” means, collectively,all instruments, documents and agreements executed by or on behalf of Borrowerand its Subsidiaries to provide collateral security with respect to theObligations, including, without limitation, any Security Agreement, anyCollateral Contract

 

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Assignments and allinstruments, documents and agreements executed pursuant to the terms of theforegoing, in such case, as amended, modified, supplemented, extended andrestated from time to time.

 

“**Security Interest**” means all Liens in favorof Administrative Agent, for the benefit of itself, Syndication Agent,Collateral Agent and Lenders, created hereunder or under any of the SecurityDocuments to secure the Obligations.

 

“**Subsidiary**” means, with respect to anyPerson, any corporation, partnership, association or other business entity ofwhich more than 50% of the total voting power of shares of stock (or equivalentownership or controlling interest) entitled (without regard to the occurrenceof any contingency) to vote in the election of directors, managers or trusteesthereof is at the time owned or controlled, directly or indirectly, by thatPerson or one or more of the other Subsidiaries of that Person or a combinationthereof.

 

“**Term Loan**” means the Loan under the TermLoan Commitment.

 

“**Term Loan Commitment**” means $50,000,000.

 

“**Term Loan Facility**” means the term loancredit facility extended to Borrower pursuant to Subsection 1.1(B).

 

“**Term Loan Maturity Date**” means the earlierof (i) the acceleration of the Obligations pursuant to Subsection 6.3or (ii) October 31, 2010.

 

“**Term Loan Note** or “**Term Loan Notes**” means one or more of thenotes of Borrower substantially in the form of Exhibit 10.1(C),or any combination thereof, and any replacements, restatements, renewals orextensions of any such notes, in whole or in part.

 

“**Total Lender Loan Commitment**” means theaggregate commitments of any Lender with respect to the Loan Commitments.

 

“**Total Leverage Ratio**” means, as of the dateof calculation, the ratio derived by dividing (a) Indebtedness by(b) EBITDA for the most recently completed four fiscal quarters.

 

10.2                           OtherDefinitional Provisions. References to “Sections,” “Subsections,” “Exhibits”and “Schedules” shall be to Sections, Subsections, Exhibits and Schedules,respectively, of this Agreement unless otherwise specifically provided. Any ofthe terms defined in Subsection 10.1 may, unless the context otherwiserequires, be used in the singular or the plural depending on the reference. Inthis Agreement, “hereof,” “herein,” “hereto,” “hereunder” and the like mean andrefer to this Agreement as a whole and not merely to the specific section,paragraph or clause in which the respective word appears; words importing anygender include the other gender; references to “writing” include printing,typing, lithography and other means of reproducing words in a tangible visibleform; the words “including,” “includes” and “include” shall be deemed to befollowed by the words “without limitation”; references to agreements and othercontractual instruments shall be deemed to include subsequent amendments,assignments, and other modifications thereto, but only to the extent suchamendments, assignments and other modifications are not prohibited by the termsof

 

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this Agreement or anyother Loan Document; references to Persons include their respective permittedsuccessors and assigns or, in the case of governmental Persons, Personssucceeding to the relevant functions of such Persons; and all references tostatutes and related regulations shall include any amendments of same and anysuccessor statutes and regulations. All references in the Loan Documents to aLender party to a Related Interest Rate Agreement shall include any Person thatwas a Lender (or an Affiliate of a Lender) at the time it entered into suchRelated Interest Rate Agreement and subsequently ceased to be a Lender.

 

[Signatures follow on the next page.]

 

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Witness the due executionhereof by the respective duly authorized officers of the undersigned as of thedate first written above.

 
|   | **ATLANTIC TELE-NETWORK, INC.,** |
|--------|---------------------------------------|
|   | **as Borrower**                       |
|   |                                  |
|   |                                  |
|   | By:                                   |   |   |
|   |                                  | Name: |   |
|   |                                  | Title: |   |

 

 

[Signaturescontinued on following page]

 

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[Signaturescontinued from previous page]

 

 
| Commitment to make  Revolver  Loans: $0          | ** ** | **COBANK,  ACB,** as Administrative  Agent, Arranger, an Issuing Bank and a  Lender |
|--------------------------------------------------|------------|-------------------------------------------------------------------------------------|
|                                             |       |                                                                                |
| Pro Rata Share of  Revolver Loan  Commitment: 0% |       |                                                                                |
|                                             |       |                                                                                |
| Commitment to make the  Term                     |       | By:                                                                                 |   |   |
| Loan: $50,000,000                                |       |                                                                                | John Cole  Vice President |
|                                             |       |                                                                                |
| Pro Rata Share of the  Term Loan:  100%          |       | Address:                                                                            |
|                                             |       |                                                                                |
|                                             |       | CoBank,  ACB                                                                        |
| Total Lender Loan  Commitment:                   |       | 900  Circle 75 Parkway                                                              |
| $50,000,000                                      |       | Suite 1400                                                                     |
|                                             |       | Atlanta,  Georgia 30339-5946                                                        |
| Pro Rata Share of the  Revolver                  |       | Attn:  Communications and                                                           |
| Loan Commitment and  Term Loan                   |       | Energy  Banking Group                                                               |
| Commitment: 71.43%                               |       | Fax  No.: (770) 618-3202                                                            |
|                                             |       |                                                                                |
|                                             |       | With copy to:                                                                       |
|                                             |       |                                                                                |
|                                             |       | CoBank,  ACB                                                                        |
|                                             |       | 5500  S. Quebec Street                                                              |
|                                             |       | Greenwood  Village, CO 80111                                                        |
|                                             |       | Attn:  Communications and Energy                                                    |
|                                             |       | Banking  Group                                                                      |
|                                             |       | Fax  No.: (303) 224-2718                                                            |

 

[Signatures continued on following page]

 

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 [Signaturescontinued from previous page]

 
| Commitment to make  Revolver                             | ** ** | **BANCO POPULAR DE PUERTO**                        |
|----------------------------------------------------------|------------|----------------------------------------------------|
| Loans:  $20,000,000                                 |       | **RICO,** as an  Issuing Lender and a  Lender |
|                                                     |       |                                               |
| Pro Rata Share of  Revolver Loan  Commitment:  100% |       |                                               |
|                                                     |       |                                               |
|                                                     |       | By:                                                |   |   |
| Commitment to make the  Term                             |       |                                               | Valentino I. McBean |
| Loan:  $0                                           |       |                                               | Senior Vice President  and Regional |
|                                                     |       |                                               |              Manager |
|                                                     |       |                                               |
| Pro Rata Share of the  Term Loan:  0%                    |       |                                               |
|                                                     |       |                                               |
|                                                     |       | Address:                                           | Banco  Popular de Puerto Rico |
|                                                     |       |                                               | P.O. Box  8580 Charlotte Amalie |
| Total Lender Loan  Commitment:                      |       |                                               | St.  Thomas, U.S. Virgin Islands |
| $20,000,000                                              |       |                                               |   | 00801 |
|                                                     |       |                                               | Attn: | Valentino  I. McBean |
| Pro Rata Share of the  Revolver                          |       |                                               |   | Sr.  Vice President & |
| Loan Commitment and  Term Loan                           |       |                                               |   | Regional  Manager |
| Commitment:  28.57%                                 |       |                                               |   |
|                                                          |            |                                                    |  |  |  |  |  |

 

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**Schedule 3.3(C)**

 

**ExistingInvestments**

 

1.                                                              Securitiesheld in Borrower’s account with Bear, Stearns & Co. in Boston, MA. Thesesecurities include a money market account and various short term (less than onemonth maturities) commercial paper contracts.

 

2.                                                              Investmentsin Subsidiaries noted on Schedule 5.19.

 

3.                                                              Investmentsin Affiliates:

 
| **Name of Affiliate** | ** ** | **Member/Shareholder** | ** ** | **Units  Owned** | ** ** | **%  Owned** | ** ** |
|---------------------------------|------------|------------------------|------------|------------------|------------|--------------|------------|
| Commnet  of Delaware, LLC*      |       | Commnet Wireless, LLC  |       |             |       | 50.00        |       |
|                            |       |                   |       |             |       |         |       |
| Commnet  of California, LLC*    |       | Commnet Wireless, LLC  |       |             |       | 50.00        |       |
|                            |       |                   |       |             |       |         |       |
| Commnet  of Florida, LLC        |       | Commnet Wireless, LLC  |       |             |       | 49.00        |       |

 

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*  The assets of these two entities were sold inJune 2007.

 

4.                                                              OtherInvestments in Affiliates:

 

•                  Pursuantto the Loan Agreement by and between Commnet Wireless, LLC (as assigned byCommnet Wireless, Inc.) and Commnet of Florida, LLC, dated September 18,2002, and the related Non-Negotiable Promissory Note, dated September 18,2002, Commnet of Florida, LLC currently owes Commnet Wireless, LLC $1,177,000in note principal.

 

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**Schedule 3.8**

 

**Transactionswith Affiliates**

 

1.                In July 2008,Bermuda Digital Communications, Ltd. (BDC) has the option to purchase from theBorrower all of the BDC equity owned by Borrower at a purchase price equal tothe fair market value of such shares.

 

2.                BDC and Borrower’sSubsidiaries have an obligation to pay management fees to Borrower; whichobligation, in BDC’s case, terminates in 2008.

 

3.                In August 2007,Borrower’s subsidiaries, ATN Haiti S.A. and Transnet S.A. sold certain assetsheld by them to a Haitian company in which the Chairman has made an investment.

 

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**Schedule 5.3(A)**

 

**Jurisdictionof Organization**

 

A.                                   Organizationand Powers

 
| **Name**                                         | ** ** | **Jurisdiction**                                                                         | ** ** | **Exceptions to Power and  Authority** |
|--------------------------------------------------|------------|------------------------------------------------------------------------------------------|------------|-------------------------------------------------------|
| Borrower                                         |       | Delaware,  U.S. Virgin  Islands – St. Thomas, U.S.  Virgin Islands – St. Croix |       | None.                                                 |
| Guyana Telephone &  Telegraph Co., Ltd. |       | Guyana                                                                                   |       | None.                                                 |
| Choice Communications,  LLC                      |       | U.S. Virgin  Islands – St.  Thomas, U.S. Virgin  Islands – St. Croix           |       | None.                                                 |
| Bermuda Digital  Communications, Ltd.            |       | Bermuda                                                                                  |       | None.                                                 |
| ATN (Haiti) S.A.*                                |       | Haiti                                                                                    |       | None.                                                 |
| Transnet, S.A.*                                  |       | Haiti                                                                                    |       | None.                                                 |
| Commnet Wireless, LLC                            |       | Delaware                                                                                 |       | None.                                                 |
| Commnet of Arizona, LLC                          |       | Delaware                                                                                 |       | None.                                                 |
| Commnet Four Corners,  LLC                       |       | Delaware                                                                                 |       | None.                                                 |
| Commnet Illinois, LLC                            |       | Delaware                                                                                 |       | None.                                                 |
| Commnet Midwest, LLC                             |       | Delaware                                                                                 |       | None.                                                 |
| Excomm, LLC                                      |       | Delaware                                                                                 |       | None.                                                 |
| Commnet of Florida, LLC                          |       | Florida                                                                                  |       | None.                                                 |
| Elbert County Wireless,  LLC                     |       | Colorado                                                                                 |       | None.                                                 |
| Commnet of California,  LLC*                     |       | Delaware                                                                                 |       | None.                                                 |
| Commnet of Delaware,  LLC*                       |       | Delaware                                                                                 |       | None.                                                 |
| MoCelCo, LLC                                     |       | Delaware                                                                                 |       | None.                                                 |
| Gila County Wireless,  LLC                       |       | Delaware                                                                                 |       | None.                                                 |
| Sovernet Holding  Corporation                    |       | Delaware                                                                                 |       | None.                                                 |
| SoVerNet, Inc.                              |       | Vermont                                                                                  |       | None.                                                 |
| National Mobile  Communications Corporation      |       | Massachusetts                                                                            |       | None.                                                 |

 

----

*** **Substantially all of the assets of each ofthese entities have been sold, and these entities will be dissolved as soon aspracticable.

 

----

 

**Schedule 5.3(C)**

 

**Qualificationto Transact Business**

 

C.                                     Qualification

 
| **Name**                                         | ** ** | **Jurisdiction**                                                                                                   |
|--------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------|
| Borrower                                         |       | California,  Delaware, Massachusetts, U.S. Virgin Islands –  St. Thomas, U.S. Virgin Islands – St. Croix |
| Guyana Telephone &  Telegraph Co., Ltd. |       | Guyana                                                                                                             |
| Choice Communications,  LLC                      |       | U.S. Virgin  Islands – St. Thomas, U.S. Virgin Islands – St. Croix                                       |
| Bermuda Digital  Communications, Ltd.            |       | Bermuda                                                                                                            |
| ATN (Haiti) S.A.*                                |       | Haiti                                                                                                              |
| Transnet, S.A.*                                  |       | Haiti                                                                                                              |
| Commnet Wireless, LLC                            |       | Delaware                                                                                                           |
| Commnet of Arizona, LLC                          |       | Delaware                                                                                                           |
| Commnet Four Corners,  LLC                       |       | Delaware, New  Mexico                                                                                              |
| Commnet Illinois, LLC                            |       | Delaware,  Illinois, Missouri                                                                                      |
| Commnet Midwest, LLC                             |       | Delaware, Kansas                                                                                                   |
| Excomm, LLC                                      |       | Delaware                                                                                                           |
| Commnet of Florida, LLC                          |       | Florida                                                                                                            |
| Elbert County Wireless,  LLC                     |       | Colorado                                                                                                           |
| Commnet of California,  LLC*                     |       | Delaware,  California                                                                                              |
| Commnet of Delaware,  LLC*                       |       | Delaware                                                                                                           |
| MoCelCo, LLC                                     |       | Delaware, Missouri                                                                                                 |
| Gila County Wireless,  LLC                       |       | Delaware,  Arizona                                                                                                 |
| Sovernet Holding  Corporation                    |       | Delaware                                                                                                           |
| SoVerNet, Inc.                              |       | Vermont, New  Hampshire                                                                                            |
| National Mobile  Communications Corporation      |       | Massachusetts,  Vermont, New Hampshire                                                                             |

 

----

* Substantially all of the assets of each of these entities have beensold, and these entities will be dissolved as soon as practicable.

 

----

 

**Schedule 5.10**

 

**Litigation,Etc.**

 

1.               The litigation andother contingencies, as described with reasonable specificity, in Note 10 tothe Financial Statements included in the Borrower’s Quarterly Report on Form 10-Qfiled with the SEC on August 9, 2007.

 

----

 

**Schedule 5.11**

 

**LaborMatters**

 

**5.11(i)**                                                            CollectiveBargaining Agreements and Union Certification

 

1.               GT&T “Handbook”:  Memorandum of Agreement between GT&T andthe Guyana Postal and Telecommunication Workers Union.

 

2.               Memorandum ofAgreement between GT&T and Guyana Postal and Telecommunication WorkersUnion, in Respect of Increases in Salaries for Employees in the BargainingUnit, From October 1, 2006 to September 30, 2008.

 

**5.11(ii)****       **                                                Strikes,Labor Disputes, etc.

 

1.               No significantdisputes in last four years in Guyana or elsewhere. Union contract isre-negotiated every two years and current contract runs until September 2008.

 

----

 

**Schedule 5.13(A)**

 

**LicenseInformation**

 

1.               Call Home TelecomLLC License

 

•                  InternationalTelecommunications Certificate issued to Call Home Telecom LLC    (ITC-214-20000705-00393).

 

2.               ChoiceCommunications Licenses

 

•                  SpecialTemporary Authorization, May 24, 2005, related to EBS (ITFS formerly) andBRS (MDS formerly) broadcast rights from sites on St. Thomas and St. Croix.

 

•                  FCCMemorandum Opinion and Order, June 22, 2005, providing waiver of filingfreeze for new EBS applications.

 

•                  LocalMultipoint Distribution Service License – WPLM395 – US Virgin Islands, expiringJune 17, 2008.

 

•                  InternationalTelecommunications Certificate (ITC-214-20021219-0064), Global or LimitedGlobal Facilities – Based and Resale Service on February 7, 2003.

 

3.             GT&T License

 

•                  Licensegranted to GT&T under Section 7 of the Telecommunications Act of 1990,December 19, 1990.

 

•                  Licenseto provide throughout Guyana public telephone, radio telephone, cellular radiotelephone, pay station telephone and national and international voice and datatransmission, a month other services.

 

 
| **Licensee Name**    | ** ** | **Radio Service** | ** ** | **FCC Author.**               | ** ** | **Other Govt. Author.**                                                                                                                                                               |
|---------------------------|------------|------------------------|------------|------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Commnet of Arizona, LLC   |       | CL                     |       | KNKR208                            |       | N/A                                                                                                                                                                                             |
| Commnet of Florida        |       | CL                     |       | WPSJ791                            |       | N/A                                                                                                                                                                                             |
| Commnet Four Corners, LLC |       | CW  CW  CW             |       | KNLH699  WPYH715  WPYH716  WPQZ728 |       | KNLG838-L1 &  KNLG840-L1, spectrum  manager leasehold  interests in KNLG838 &  KNLG840, licenses  owned by subsidiaries of  T-Mobile                                          |
| Commnet Illinois, LLC     |       | CW  CW  CW             |       | WQAE415  WQAF337  WQAJ963          |       | On August 1, 2005,  Commnet Illinois, LLC  acquired the PCS  licenses known as call  signs KNLG216 (BTA  337D – Ottumwa, Iowa)  and KNLH449 (BTA  230F – Kirksville,  Missouri). |

 

----

 
| Gila County Wireless, LLC   |   | CW                                                                 |   | WQAE414                                                                                                                                                 |   | N/A                                                                                                         |
|-----------------------------|--------|--------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|
| Elbert County Wireless, LLC |   | CL                                                                 |   | KNKR202                                                                                                                                                 |   | KNLF244-L1, spectrum  manager leasehold  interest in KNLF244, a  license owned by a  subsidiary of T-Mobile |
| Excomm, LLC                 |   | CL  CL  CL  CL  CL  CL  CL  CL  CL  CL  CL  CL  CL  CL  CL  CL  CL |   | WPUC784  WPUD593  WPUD594  WPUH602  WPUH619  WPUH805  WPUJ480  WPUK842  WPUP317  WPUX427  WPUY963  WPVI996  WPZE799  WPRS845  WPRS901  WPRS917  WPRS922 |   | N/A                                                                                                         |
| MoCelCo, LLC                |   | CL                                                                 |   | WPTD845                                                                                                                                                 |   | N/A                                                                                                         |

 

----

 

**Schedule 5.13(B)**

 

**ValidLicenses**

 

1.               Commnet Illinois,LLC operates in several counties in the state of Illinois on a day-to-day basisas a manager under the supervision and control of the licensee of the involvedbroadband PCS spectrum, a subsidiary of AT&T Mobility, LLC. CommnetIllinois, LLC does so pursuant to a management agreement entered into betweenitself and the AT&T Mobility, LLC subsidiary (at the time an AT&TWireless subsidiary) prior to the advent of the FCC’s spectrum leasing rules. Whenthe FCC spectrum leasing rules later came into effect, Commnet Illinois,LLC suggested to AT&T Wireless that the management agreement be modified tobecome a spectrum manager lease agreement, and an accompanying FCC filing bemade. However, AT&T Wireless replied that it could not amend or modify anyexisting agreements, due to the prospect of a merger with Cingular, LLC. Afterthat merger was completed, AT&T Mobility, LLC advised Commnet Illinois, LLCthat its personnel were too busy with implementing the merger to focus onmodifying the Commnet Illinois, LLC agreement. Commnet Illinois, LLC hascontinued to raise the issue with AT&T Mobility, LLC. In the meantime,Commnet Illinois, LLC continues to operate in these markets day-to-day,pursuant to the still-existing agreement.

 

Whether the advent of thenew spectrum leasing set of rules would require the filing of anotification to the FCC (jointly by Commnet Illinois, LLC and AT&TMobility, LLC), is an open question. The matter is beyond Commnet Illinois, LLC’scontrol, as such a filing is a joint filing, and would have to be signed byAT&T Mobility, LLC as well as Commnet Illinois, LLC. The violation would bea joint violation by both Commnet Illinois, LLC and AT&T Mobility, LLC. CommnetWireless, LLC is currently negotiating the sale of these markets to AT&TMobility, LLC.

 

2.               Commnet Wireless,LLC and its “Subsidiaries”, as that term is defined in the Credit Agreement,are not in compliance with FCC rules and regulations pertaining to “enhanced911” (“E911”).

 

Aswith most rural carriers, Commnet Wireless, LLC and its “Subsidiaries” and “CompanyInvestments”, as those terms are defined in the Merger Agreement (the “CommnetGroup”), face substantial obstacles to achieving full compliance with FCC rules pertainingto “enhanced 911” (“E911”). As with other rural carriers, the Commnet Groupfiled a request for waiver with the FCC, with respect to implementation ofPhase 2 E911 location capability.

 

In its *Order on Reconsideration*, 22 FCC Rcd 2571(2007), the FCC denied the Commnet Group’s request for waiver in its entirety. Atthis time, Commnet is therefore in violation of FCC rules with respect tothose five PSAPs (three in the Illinois/Missouri region, one in New Mexico, andone in Florida) that have requested Phase 2 E911 capability. (Commnet is alsoproviding basic 911, not Phase 1 E911, in two of the three Illinois/Missourijurisdictions and the New Mexico jurisdiction, a separate rule violation.) Commnet has been working cooperatively with those particular PSAPs, explainingthe difficulty it faces in meeting the E911 requirements. 

 

----

 

****Commnet has recently beenauthorized to receive reimbursement from the state of Florida for Phase 2 E911implementation costs. Commnet will be installing Phase 2 E911 infrastructureequipment in Florida (although, based on current projections, while suchequipment will provide superior location capability to Phase 1 E911, it wouldnot meet the FCC’s Phase 2 accuracy thresholds, due to the lack of sufficienttriangulation possibilities in the Florida Keys). The current target date forimplementation of service with this E911 infrastructure equipment is the lastweek of November, 2007. At this time, none of the involved PSAPs has complainedto the FCC about Commnet’s failure to implement Phase 2 E911, and there is noenforcement proceeding pending or, to Commnet’s knowledge, threatened.****

 

----

 

**Schedule 5.17**

 

**MaterialContracts**

 
| **Date** | ** ** | **Company**                                    | ** ** | **Contract**   |
|----------|------------|------------------------------------------------|------------|----------------|
| 6/20/05  |       | Borrower/John Foster  Real Estate c/o AT&T |       | Accepted Offer |

 

•                  GT&Thas bilateral agreements with a number of international carriers that generate                                               revenuesin excess of $1 million a year, including MCI, IDT, TSTT (Trinidad), BET                       (Barbados),AT&T and British Telecom.

•                  TheAgreements referenced on Schedule 5.11.

•                  TheGT&T and Choice Licenses referenced on Schedule 5.13(A).

•                  Numerousoutstanding purchase orders issued by GT&T to Nortel Networks and FWAAirspan                           (approximately$3.3 million remaining to be paid) upon delivery and/or satisfaction with                           performancefor wireline and wireless (GSM) equipment.

•                  MasterAgreement, dated March 23, 2004, between GT&T and CerillionTechnologies Limited for purchase of a billing system.

•                  PurchaseAgreement dated June 18, 1990, between the Government of the Cooperative                               Republicof Guyana and Borrower.

•                  ManagementServices Contract, dated July 17, 1998, between Borrower and BDC.

•                  Subscriptionand Loan Agreement dated July 17, 1998 among Borrower, BDC and Kurt Eve.

•                  Acquisitionof Membership Interests of Commnet Wireless, LLC by Borrower and itswholly-owned subsidiary, CW Acquisition, LLC, dated September 15, 2005.

•                  Agreementand Plan of Merger by and among Borrower, ATN VT Sub, Inc., Sovernet, Inc.and Certain Shareholders of Sovernet, Inc., dated February 10, 2006.

 
| **Date** | ** ** | **Company**                                                    | ** ** | **Contract**                                        |
|----------|------------|----------------------------------------------------------------|------------|-----------------------------------------------------|
| 5-12-04  |       | AT&T Wireless  Services, Inc. / Commnet Wireless, LLC |       | GSM Build-Out Agreement                             |
| 12-19-03 |       | AT&T Wireless PCS,  LLC / Commnet Wireless, LLC            |       | Second Amended and  Restated CS, M and S Agreement  |
| 2-18-03  |       | AT&T Corp. /  Commnet Wireless, Inc.                  |       | Amended and Restated  Master Carrier Agreement (LD) |
| 4-22-03  |       | AT&T Wireless  Services, Inc. / Commnet Wireless, LLC |       | GSM Build-Out Agreement                             |
| 11-30-04 |       | Hawkeye Switching /  Commnet Wireless, LLC                     |       | Cellular Switching  Agreement (CDMA)                |
| 4-07-03  |       | Illuminet, Inc. / Commnet  Wireless, LLC                  |       | ISUP Messaging Service  Agreement                   |
| 11-01-03 |       | Illuminet, Inc. /  Commnet Wireless, LLC                  |       | Amendment One to ISUP  Messaging Service Agreement  |
| 11-01-03 |       | Illuminet, Inc. /  Commnet Wireless, LLC                  |       | Amendment One to IS-41  Transport Service Agreement |
| 3-15-04  |       | Qwest Communications  Corp. / Commnet Wireless, LLC            |       | Wholesale Services  Agreement (LD)                  |

 

----

 
| 5-06-04  |   | Qwest Communications  Corp. / Commnet Wireless, LLC |   | Amendment No. 1 to  Wholesale Services Agreement               |
|----------|--------|-----------------------------------------------------|--------|---------------------------------------------------------------------|
| 8-06-04  |   | Qwest Communications  Corp. / Commnet Wireless, LLC |   | Amendment No. 2 to  Wholesale Services Agreement               |
| 3-08-05  |   | Qwest Communications  Corp. / Commnet Wireless, LLC |   | Amendment No. 3 to  Wholesale Services Agreement               |
| 4-29-05  |   | Qwest Communications  Corp. / Commnet Wireless, LLC |   | Amendment No. 4 to  Wholesale Services Agreement               |
| 11-16-03 |   | Syniverse (EDS) /  Commnet Wireless, LLC            |   | Interoperator Services  Agreement                                   |
| 8-16-03  |   | Syniverse (EDS) /  Commnet Wireless, LLC            |   | Interoperator Services  Agreement (FirstSource Exhibit)             |
| 3-01-05  |   | Syniverse (EDS) / Commnet  Wireless, LLC            |   | Amendment to the  Interoperator Services Agreement                  |
| 2-14-06  |   | Syniverse / Commnet  Wireless, LLC                  |   | Master Services  Agreement (Wholesale/Access/RCA)                   |
| 5-01-06  |   | Syniverse / Commnet  Wireless, LLC                  |   | Inpack Service  Attachment to MSA                                   |
| 4-09-04  |   | Commnet Supply, LLC /  Commnet Wireless, LLC        |   | Supply Agreement                                                    |
| 9-14-04  |   | T-Mobile / Elbert  County Wireless, LLC             |   | Spectrum Manager Lease  Agreement (Elbert County)                   |
| 6-13-05  |   | T-Mobile / Commnet Four  Corners, LLC               |   | Spectrum Manager Lease  Agreement (Pima County)                     |
| 6-13-05  |   | T-Mobile / Commnet Four  Corners, LLC               |   | Spectrum Manager Lease  Agreement (Yuma County)                     |
| 11-24-03 |   | United Clearing Plc /  Commnet Wireless, LLC        |   | Agreement for Financial  Clearing and Settlement Services           |
| 4-01-05  |   | United Clearing Plc /  Commnet Wireless, LLC        |   | Addendum Agreement  (Data)                                          |
| 6-03-00  |   | AT&T Wireless  Services, Inc.              |   | Intercarrier Roamer  Service Agreement                              |
| 2-01-03  |   | AT&T Wireless  Services, Inc.              |   | Amendment to  Intercarrier Roamer Services Agreement                |
| 12-19-03 |   | AT&T Wireless  Services, Inc.              |   | Amendment to Intercarrier  Roamer Services Agreement                |
| 2-01-03  |   | AT&T Wireless  Services, Inc.              |   | GSM/PCS Roaming  Agreement for GSM                                  |
| 5-16-03  |   | Cingular Wireless, LLC                              |   | Intercarrier  Multi-Standard Roaming Agreement                      |
| 7-23-03  |   | Cingular Wireless, LLC                              |   | Amendment No. 1 to  Intercarrier Multi-Standard Roaming Agmnt. |
| 8-16-04  |   | Cellco  Partnership/Verizon Wireless                |   | Intercarrier Roamer  Service Agreement                              |
| 4-12-04  |   | T-Mobile USA, Inc.                             |   | International Roaming  Agreement for GSM and/or 3GSM                |
| 10-04-04 |   | T-Mobile USA, Inc.                             |   | First Amendment to  International Roaming Agreement                 |
| 9-01-00  |   | WirelessCO, L.P./Sprint  Spectrum                   |   | Intercarrier Roamer  Service Agreement                              |

 

----

 

**Schedule 5.19**

 

**Subsidiaries**

 
| **Name**                                         | ** ** | **Member/Shareholder**           | ** ** | **Units Owned**              | ** ** | **% Owned**                          | ** ** |
|--------------------------------------------------|------------|----------------------------------|------------|-----------------------------------|------------|-------------------------------------------|------------|
| Guyana  Telephone & Telegraph Co., Ltd. |       | Atlantic Tele-Network, Inc. |       | 16,500                            |       | 80.00                                     |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Choice  Communications, LLC                      |       | Atlantic Tele-Network, Inc. |       | n/a                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| ATN  (Haiti) S.A.                                |       | Atlantic Tele-Network, Inc. |       | 100                               |       | 80.00                                     |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Transnet,  S.A.                                  |       | Atlantic Tele-Network, Inc. |       | 30                                |       | 80.00                                     |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Commnet  Wireless, LLC                           |       | Atlantic Tele-Network, Inc. |       | 100                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Commnet  of Arizona, LLC                         |       | Commnet Wireless, LLC            |       | 3,000                             |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Commnet  Midwest, LLC                            |       | Commnet Wireless, LLC            |       | 100                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Commnet  Four Corners, LLC                       |       | Commnet Wireless, LLC            |       | 56                                |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Commnet  Midwest, LLC                            |       | Commnet Wireless, LLC            |       | 100                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Excomm,  LLC                                     |       | Commnet Wireless, LLC            |       | 100                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Elbert  County Wireless, LLC                     |       | Commnet Wireless, LLC            |       | 82.75                             |       | 82.75                                     |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Commnet  Illinois, LLC                           |       | Commnet Wireless, LLC            |       | 3,000                             |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| MoCelCo,  L.L.C.                                 |       | Commnet Wireless, LLC            |       | 100                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Sovernet  Holding Corporation                    |       | Atlantic Tele-Network, Inc. |       | 960 common,  127.33736  preferred |       | 96.00 of common  and 100.00 of  preferred |       |
|                                             |       |                             |       |                              |       |                                      |       |
| SoVerNet, Inc.                              |       | Sovernet Holding  Corporation    |       | 100                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| National  Mobile Communications Corporation      |       | SoVerNet, Inc.              |       | 200,000                           |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |
| Gila  County Wireless, LLC                       |       | Commnet Wireless, LLC            |       | 100                               |       | 100.00                                    |       |
|                                             |       |                             |       |                              |       |                                      |       |

 

----

 

**Exhibit 1.3**

 

**Form ofNotice of Borrowing/Conversion/Continuation**

 

----

 

**Exhibit 4.5(C)**

 

**Form ofCompliance Certificate**

 

----

 

**Exhibit 10.1(A)**

 

**LenderAddition Agreement**

 

----

 

**Exhibit 10.1(B)**

 

**Form ofRevolver Note**

 

----

 

**Exhibit 10.1(C)**

 

**Form ofTerm Note**

 

----